Sunday, October 1, 2023

How to Apply for an IPO Online & Offline

How to Apply for an IPO Online & Offline

An initial public offering (IPO) marks an exciting milestone for a company as it ventures into the public markets. It is a process through which a private company offers its shares to the general public for the first time, allowing investors to become shareholders and participate in the company’s growth. Whether you are a seasoned investor or a first-time participant in the stock market, understanding how to apply for an IPO is crucial to capitalize on potential opportunities. The application process for an IPO can be carried out online and offline, each offering distinct advantages and conveniences.

In this guide, we will explore the step-by-step procedures for applying to an IPO using both methods, empowering you to make informed decisions and potentially secure a slice of the next big investment opportunity. For those seeking a seamless and efficient way to participate in IPOs, we will specifically focus on the process of applying for an IPO online, enabling you to harness the power of technology and modern financial platforms to invest with ease.

Requirements to Apply for an IPO

If you are planning to invest in an IPO, you will need the following things to apply for an IPO online:

  • Demat Account: A Demat account is necessary to invest in an IPO. It is like a bank account where you can store your shares after purchase. 
  • Trading Account: You need the best trading account with a reputed SEBI-certified Depository Participant before applying for an online IPO. 
  • UPI ID: You will need a UPI ID to apply for an IPO. Your existing UPI ID will work, or you can create a new ID by linking your bank account. 
  • Bank Account: An active bank account is essential to apply. When you purchase a share, its amount is blocked in your bank account and is debited only after the allotment.

Eligibility Criteria for IPO Application

To apply for an IPO online, you must fulfil certain eligibility conditions before proceeding. Here are a few of them:

  • You must be a Qualified Institutional Buyer, Retail Individual Investor, Non-Institutional Buyer, or Employee of the IPO-bringing company. These are the four types of approved investors who can invest in IPOs.
  • You must have a Trading and Demat account with a recognised Indian DP.
  • You must have a PAN (Permanent Account Number).
  • You must have your savings or current account linked with a Demat amount.
  • You must have a sufficient balance in your bank account. 

Applying for an IPO Online

There are two ways to apply IPO online. Let’s discuss the steps involved in detail:

  • Through Broker
  • Create an online account with a broker and log in. 
  • Find the IPO tab, open the current IPO section, and select the IPO from the list.
  • Enter the lot size you want to bid for and the bid price. Prefer placing the bid at the cut-off rate or the maximum price at the price band’s upper end to increase the chances of allotment.
  • Type your UPI ID and submit. Approve the transaction on the UPI app and wait for the exchange to approve your bid.
  • You will receive a mandate notification through your UPI app. Until then, the money will remain locked in your broker account. 
  • Through Internet Banking
  • Use your login ID and password to log in to your Internet Banking account. 
  • Find and click on the Application Supported by Blocked Amount (ASBA) tab. 
  • Click ‘Apply IPO’ and select the IPO from the list of IPOs.
  • Enter your name, PAN, bid quantity, and price and click on submit. You must submit the bid before 2 pm for acceptance on the same day. If you submit it after 2 pm, it will be accepted the next day.

Applying for an IPO Offline

  • Visit your broker’s office and request an IPO application form.
  • Enter the details required and fill out the application form.
  • Submit the form to the broker with the payment cheque.
  • Remember to receive an acknowledgement form from the broker. If the IPO amount is more than ₹50,000, you will also need to provide a copy of your PAN card with the application form.
  • You may also present the filled application form to an ASBA-participating bank linked to the IPO issue.

Benefits of an Online IPO Application

  • Saves significant time by not visiting the bank branch or broker’s office.
  • A convenient and seamless way to apply for an IPO.
  • The amount stays in the account, and you earn interest until the allotment.
  • The process is transparent and gives you complete authority over your decisions.

The online application process is extremely convenient and helps you save time and effort. You can choose between online and offline processes. Choose a SEBI-authorised broker to begin your IPO application. They can help you with a transparent and seamless application procedure. Conduct thorough research before investing.


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