How to Apply for IPO an easy to understand guide 2025

How to apply for IPO (Initial Public Offering) is one of the most asked questions, especially among first-time and new investors, and why not? With more than $5 trillion in size, India is the fifth-largest equity market in the world. It is a rapidly growing equity market and IPOs are one of the primary forces behind this growth in market capitalization. Every year, In India, with rapid economic growth, companies raise billions of dollars from the market by bringing their primary issue creating a tremendous amount of wealth for investors.

So, with the thought of applying for an IPO, new investors step into an exciting part of the stock market. An IPO allows investors to buy shares of a company before they are publicly traded, potentially letting them invest in high-growth businesses early on. But how exactly does one apply for an IPO? If you’ve been wondering about the steps and the platforms available for Indian investors, this guide is here to help. By the end, you will be confidently navigating the IPO application process and setting yourself up for that first investment.

What is an Initial public offering?

An IPO is when a private company decides to go public by offering shares for the first time. Investors consider it an opportunity to own a slice of the company’s future growth. Startup companies or companies that have been in business for decades can decide to go public through an IPO. Companies typically launch primary issues to raise capital to pay off debts, fund future growth initiatives, raise their public profile, or allow the company’s existing shareholders to diversify their holdings or create liquidity by selling all or a portion of their private shares as part of the initial public offer.

When companies announce primary issues in India, they typically classify investors into three main categories:

• Retail Investors (RII)– According to the SEBI, individuals who invest up to ₹2 lakh are retail investors. They are also known as individual investors, or non-professional market participants investing their own money in securities like stocks, bonds, mutual funds, and ETFs. They typically invest smaller amounts less frequently than institutional investors, who trade large volumes of securities on behalf of others.
• Non-Institutional Investors (NII) – Individuals willing to invest more than ₹2 lakh. High-net-worth individuals (HNIs) and salaried employees are examples of NIIs
• Qualified Institutional Buyers (QIB) – Big players like mutual funds, banks, or financial institutions. Institutional investors often qualify for premium investment services and can negotiate lower fees. Their investments can be sizable enough to impact market prices. They also have significant market influence and access to advanced trading technologies and research.

For most retail investors, the RII category (investment below 2 lacs) is where they are allowed to apply.

Now, let’s walk through the application process step by step.

How to apply for IPO

Step 1: Check Eligibility and Prepare all required Documents

Investors need to check few essentials before they start their application, they are-

• A Demat Account: (Demat or dematerialized) This is where the shares will be deposited if you’re allotted any. If you don’t already have one, open a Demat account with a trusted brokerage like Zerodha, Groww, Upstox, IIFL securities (5 paisa) etc
• A Trading Account: Most brokerages offer an integrated trading along with the Demat account.
• UPI ID: As mandated by the SEBI, UPI (Unified Payments Interface) is used for payment authorization in IPO applications.

Additionally, investors should also ensure that their PAN (Permanent Account Number) is linked to their Demat account, and they have sufficient funds in the bank account.

Step 2: Decide on the IPO and Understand Its Details

Start by researching upcoming IPOs using brokerage apps, financial news platforms, or the NSE/BSE websites. Investors should also keep track of our IPO coverage, we cover all major IPOs in depth with Gaureesh’s opinion on those. Investors should also pay attention to:

• The IPO Price Band: This is the price range within which you can bid. (Pro tip: Always bid for the upper price band to maximize the chances of IPO allotment)
• Lot Size: IPO applications are usually made in multiples of the stated lot, such as 15 or 20 shares per lot. Lot size depends upon the price band of the IPO and usually, it is in the multiple of Rs 14,000 – 15,000
• Dates for Applying: Initial public offering of a company remains open for three working days, so don’t miss the deadline. Also, keep track of all important dates like allotment date, refund date (in case of non-allotment), and listing date.

Once you’ve done your homework and decided on an IPO, it’s time to make your move.

Step 3: How to Apply for IPO Through Different Platforms

Applying via Groww

1. Open the Groww App on your phone and log in.
2. Navigate to the ‘IPO’ Section from the home screen.
3. Find the IPO you want to apply for and click ‘Apply Now.’
4. Fill in your bid—enter the number of lots and the price (bid at upper price band), and input your UPI ID.
5. Approve the UPI mandate request you’ll receive on your registered UPI app.
6. Try to apply through the UPI ID of the bank from which your Groww demat account is connected.

That’s it! Your IPO application is now submitted, and Groww will keep you updated on the status via email and SMS. Till the time the IPO allotment is done, the amount for which you have made the bid will be locked by your bank, if you’re lucky enough to receive the allotment, the amount will be withdrawn else it will be released back to your bank account by the bank.

Applying via Zerodha (Using Console)

1. Log in to Console, Zerodha’s platform for account management.
2. From the menu, click on ‘Portfolio’ > ‘IPO.’
3. You’ll see a list of open IPOs. Select the one you’re interested in.
4. Enter your bid details, including lot size and price.
5. Provide your UPI ID, and once submitted, approve the mandate in your UPI app.
6. Try to apply through the UPI ID of the bank from which your Zerodha demat account is connected.

Zerodha will process your application and notify you of any updates.

Applying via Banks (ASBA)

Many banks also offer IPO applications through the ASBA (Application Supported by Blocked Amount) feature:

1. Log in to your bank’s net banking portal.
2. Find the IPO/ASBA Section (this may vary by bank).
3. Select the IPO you wish to apply for and provide your bid details.
4. Submit the form, and your bank will block the bid amount in your account.

With ASBA, the money remains blocked until the shares are allotted.

Step 4: Understand the Allotment Process

IPO allotment is done based on demand and the available shares in each category. For retail investors (RII category), allotment is typically done via a lottery system when there’s an oversubscription. Using your PAN and Demat account number, you can check your allotment status on the registrar’s website (e.g. Link Intime or KFintech).

To understand it better, if a company ABC has an IPO and its issue gets subscribed 100x in the RII category, then the allotment will happen on a lottery basis, and only a few lucky investors will receive the subscription.

Here’s what happens next:

• If Allotted: The shares will be credited to your Demat account, and the blocked amount will be deducted from your bank account.
• If Not Allotted: The blocked funds will be released back into your account.

IPO allotment results are usually announced within a week after it closes. In the meantime, investors can track GMP (grey market premium) to take a cue on possible listing gains.

Step 5: Listing Day – What Happens Next?

Once the IPO is listed, the shares start trading on stock exchanges (BSE/NSE). If allotment was successful, you now own shares that you can choose to hold for the long term or sell, depending on market conditions and the company’s prospects based on research reports.

Be prepared for price volatility on listing day. Set your investment goals and strategy beforehand to avoid impulsive decisions. Also, investors should keep a note of lock-in open dates for various large investors, lock-in period is when a large investor can not offload his holdings, once the lock-in period ends many large investors sell shares increasing price volatility.

Pro Tips for First-Time IPO Investors

• Avoid Oversubscribed IPOs (or Be Patient): While oversubscription indicates demand, it also reduces the likelihood of getting shares, especially in the retail category. Chances of getting allotment of a heavily oversubscribed issue under the RII category are very low so investors should be realistic in their expectations and also, be patient.
• Bid at the Cut-Off Price: This increases your chances of allotment by automatically considering the final decided price.
• Plan Finances: Ensure that you have enough funds in your bank account to cover the application amount. Insufficient funds will lead to rejection.

Investing in primary issues can be rewarding when approached thoughtfully. Always research the company’s fundamentals, future plans, and financials before applying.

Start Your IPO Investment Journey Today

Applying for an Initial Public Offering may feel overwhelming at first, but, it’s simpler than it looks when broken down into these steps! Whether you use platforms like Zerodha or Groww or go through your bank’s ASBA service, having the right information and tools will help make your first IPO investment a smooth and exciting experience. You can check the list of open or upcoming IPOs by clicking here

Got questions about IPOs? Drop them in the comments below, or connect with us for expert advice. It’s time to put your investment goals into action and make your portfolio grow!