How do I apply for an IPO in India?

An Initial Public Offering (IPO) allows you to purchase shares in a company that is going public for the first time. It’s a great opportunity for investors to buy shares in a company early on, which may potentially lead to high returns if the company performs well in the market. Applying for an IPO in India is simple, but it requires following a series of steps to ensure your application is successfully processed.

1. Open a Demat and Trading Account

The first step to applying for an IPO in India is to have a Demat and trading account. A Demat account holds the shares you buy in electronic form, and a trading account allows you to buy and sell shares in the stock market. These accounts can be opened with any registered stockbroker or financial institution such as Zerodha, Angel One, or Upstox.

You will need to provide certain documents to open these accounts, including your PAN card, Aadhar card, a passport-sized photograph, and proof of your bank account. Once your accounts are activated, you are ready to apply for an IPO.

2. Check IPO Details

Before applying for an IPO, you need to review the details of the offering. Companies going public share important information in the IPO prospectus, which is available on the stock exchange’s website (BSE or NSE) and through your broker’s platform. The details include:

• Price Band: The range of the share price for the IPO.
• Opening and Closing Dates: The specific dates when the IPO will be available for subscription.
• Number of Shares Offered: How many shares the company is offering to the public.
• Company Overview: A brief description of the company’s business and objectives.

3. Submit IPO Application

Once you have reviewed the IPO details, you can apply for it through your trading platform or broker’s app. You can submit your application through the following methods:

• Online Application: Most brokers provide an online platform to apply for IPOs. After logging into your account, you can go to the IPO section and select the IPO you want to apply for.
• ASBA (Application Supported by Blocked Amount): ASBA is the most common method of applying. You can block the necessary funds in your bank account, and these funds will only be deducted if you are allotted shares.

When applying, you will need to enter the number of shares you wish to buy, select the price band, and submit the application. Once your application is submitted, the funds will be blocked until the allotment is finalized.

4. IPO Allotment

After the IPO application process ends, the shares will be allotted to the applicants. If you are successfully allotted shares, they will be credited to your Demat account. If you are not allotted shares, your application amount will be refunded. If your application is partially allotted, the amount will be adjusted accordingly.

5. Listing and Trading

After the IPO allotment, the shares are listed on the stock exchange (BSE or NSE). This usually happens within a few days after the IPO closes. Once listed, you can start trading the shares. You may choose to hold the shares for long-term growth or sell them to make a profit if the stock price increases post-listing.