What you need
- A PAN
- A demat and trading account
- A bank account in your own name, with UPI or net banking
Step by step
- Open the IPO in your broker's app while the issue is open.
- Choose the number of lots and your price. Most retail investors bid at the cut-off price.
- Enter your own UPI ID and submit.
- Approve the mandate in your UPI app with your PIN. The amount is blocked in your account, not taken.
- On allotment, the blocked amount for your shares is debited and the rest is released.
Limits and categories
| Category | Application size |
|---|---|
| Retail individual investor | Up to ₹2 lakh |
| Non-institutional investor | Above ₹2 lakh |
| Employees or shareholders | Only if the IPO has a reserved portion; see its offer document |
UPI can be used for applications up to ₹5 lakh. Above that, apply through your bank's net banking (ASBA).
Rules that get applications rejected
- One application per PAN. A second application from the same PAN is rejected, even through a different broker or bank.
- Using someone else's UPI ID or bank account.
- Not approving the UPI mandate before the deadline.
How allotment works
If the retail portion is oversubscribed, allotment is by lottery: as many applicants as possible get the minimum lot, so applying for more lots doesn't raise your chance much. You can check your allotment on the registrar's or the stock exchange's website.
The timeline
Shares list 3 working days after the issue closes (T+3), for IPOs opening from 1 December 2023. Allotment is decided before that, and blocked money for unallotted bids is released.
Before you apply
Read the offer document's risk factors and financials. An IPO can list below its price. And plan for tax: selling within 12 months means 20% on the gain. See our IPO tax guide.
Common questions
What is the maximum a retail investor can apply for in an IPO?
Up to ₹2 lakh. Applications above that are in the non-institutional category.
What is the UPI limit for IPO applications?
₹5 lakh. Above that, apply through your bank's ASBA facility.
Can I apply for an IPO twice with the same PAN?
No. Only one application per PAN is allowed; a second one is rejected.
When is the money taken for an IPO?
Only on allotment. Until then it's blocked in your account, and it's released if you don't get shares.
Two ways to sort this
Do it yourself
- Open a demat account and link your own bank and UPI.
- Apply in your broker's app while the issue is open.
- Approve the UPI mandate with your PIN before the deadline.
- Check allotment on the registrar's site before listing day.
Let an expert do it
We help you plan the tax before you sell, so a listing gain doesn't become a surprise bill.
The first chat is freeWork it out for yourself
- Capital gains: Tax on shares, mutual funds, gold and property you sold.
- Stock average: Your average price after buying more.
- ESOP tax: Perquisite tax at exercise and capital gains at sale.
See the tax if you sell your IPO shares.
Open the capital gains calculatorSources
- How to invest in an Initial Public Offer (investor education), Securities and Exchange Board of India
- Use of UPI with ASBA in public issues: FAQs (2022), Securities and Exchange Board of India
- Reduction of the timeline for listing shares in a public issue to T+3, Securities and Exchange Board of India
This guide explains the rules in general. For your own situation, .