Applying for an IPO in India looks intimidating the first time and turns out to be about six minutes of work once you have done it. What confuses people is rarely the form — it is the vocabulary stacked around it: ASBA, UPI mandate, cut-off price, bid lot, RII, NII, QIB. Each exists for a specific reason, and once you can name them the process stops feeling like a black box.
This guide walks through the whole mechanism: what you need in place, the two routes open to a retail investor, what happens to your money while your bid sits in the book, how to place the bid, and the timeline from opening to listing. It describes the process — it is not encouragement to apply to anything. Whether a particular issue deserves your money is a separate question, answered honestly in should you invest in IPOs.
Before you can apply: the three things you need
You cannot apply for a public issue in India without all three, in the same name. Aligning the paperwork in advance separates a smooth application from a rejected one.
- A demat account — allotted shares are credited electronically, and you will need its DP ID and client ID (the 16-character combination) when you apply.
- A PAN — the application is keyed to it. That is how the registrar de-duplicates applications. An inactive or mismatched PAN is an automatic rejection.
- A bank account you control — either linked to a UPI ID that supports IPO mandates, or with a bank offering ASBA through net banking. Third-party funding of an application is not permitted.
The two routes to place a bid
Route 1: UPI mandate through your broker
This is how most retail applications happen now. Open the IPO section of your broker app, select the issue, enter the number of lots and either a price within the band or the cut-off option, key in your UPI ID, and submit. The broker forwards the bid to the exchange, and a mandate request lands in your UPI app asking you to authorise a block.
Two things trip people up. The mandate is a separate action — an unapproved mandate is an invalid application, however complete the bid looked at the broker. And its approval deadline falls earlier than the notional issue close, while requests can be slow to arrive, so approve the same day you apply. The UPI route also carries an application-value ceiling set by the regulator; above it you must use the bank route. Check the current limit with your broker — it has been revised over the years.
Route 2: net banking ASBA through your bank
The original ASBA route, and still the most reliable. Log into net banking, find the IPO or ASBA section, select the issue, enter your DP ID and client ID, the quantity in lots and your bid price, and submit. Your bank blocks the amount and forwards the bid itself — no separate mandate, because the bank acting as your Self Certified Syndicate Bank does both jobs in one step. This is the choice above the UPI ceiling, and a useful fallback when mandate requests are not arriving.
| Route | How funds get blocked | Typical use |
|---|---|---|
| UPI via broker | You approve a mandate in your UPI app | Retail applications within the UPI ceiling |
| Net banking ASBA | Your bank blocks the amount directly | Larger applications; no mandate step to miss |
What ASBA actually does to your money
ASBA stands for Application Supported by Blocked Amount, the most investor-friendly part of the Indian IPO process. Your money never leaves your account. It is earmarked — unspendable, and absent from your available balance — but it stays with you and keeps earning whatever interest the account pays.
When allotment is finalised, only the amount for shares actually allotted is debited; the rest is released, and a nil allotment means the whole block lapses. This replaced an older system of cheques and refunds, removing weeks of float risk from the retail investor.
Placing the bid: lots, price band and cut-off
Bid lots
You cannot buy an arbitrary number of shares in an IPO. The issuer defines a lot size and every bid must be for one lot or a whole multiple of it. The lot size is set so that the value of one lot falls inside a prescribed minimum-application range, which is why the entry ticket for mainboard issues is broadly similar whatever the share price: a high-priced share gets a small lot, a low-priced one a large lot. On the SME platforms the minimum is set far higher — see SME IPO vs mainboard IPO.
The price band and the cut-off option
A book-built issue has no fixed price. It has a band with a floor and a cap, and you bid inside it in specified tick increments. When the book closes, the final price is discovered from where demand actually sits — and every bid below that price falls out of the book entirely, allotted nothing.
That risk is why the cut-off option exists, and why most retail applicants use it. Bidding at cut-off means agreeing in advance to pay whatever price is discovered, up to the cap. Funds are blocked at the cap and the difference released if the final price is lower. Only retail investors and eligible reserved categories may bid at cut-off; institutions and non-institutional applicants must name a price.
Revising or withdrawing a bid
Retail investors can revise a bid in price or quantity, and can withdraw it entirely, any time until the issue closes. That is a retail-only privilege — non-institutional and institutional bidders may revise but cannot withdraw once in the book. Revisions go through the route you applied by, and revising upward needs a fresh mandate for the higher amount.
Know what you already own first
Before you add anything new, AIVITTA reads your live holdings read-only and shows your real concentration, sector and risk picture — so a new position is a decision, not an accident.
The categories: who you are actually competing against
An IPO book is not one queue. It splits into reserved portions for different classes of investor, and knowing which queue you stand in changes how you read the subscription numbers.
| Category | Who it covers | How shares get shared out |
|---|---|---|
| QIB | Mutual funds, insurers, banks, foreign portfolio investors | Allocated within the rules by the issuer and lead managers |
| NII / HNI | Individuals and bodies applying above the retail ceiling | Proportionate, split into a smaller- and a larger-application bucket |
| RII (retail) | Individuals applying up to the retail value ceiling | Minimum lot to as many applicants as possible, by draw when oversubscribed |
| Employees / shareholders | Where the issuer carves out a reservation | A separate reserved bucket, sometimes at a discount |
Each category is reserved a defined share of the issue, and the split is not the same for every company: it depends on which eligibility route the issuer used, and a company that does not meet the prescribed profitability and track-record norms must allot a substantially larger portion to institutions and a much smaller one to retail. The exact percentages for any issue are in its Red Herring Prospectus — read them there rather than carrying an assumed number from one IPO to the next.
The consequence is simple: your odds are governed by the retail subscription multiple, not the headline figure. An issue many times subscribed on institutional demand while the retail portion is barely covered is an easy allotment for you; the reverse is not. How allotment is decided covers the mechanics.
The timeline, end to end
- Anchor allocationA slice of the institutional portion goes to anchor investors ahead of the opening. The anchor book is published and read as an early demand signal.
- The issue opensThe bidding window runs a small number of working days, with the exchanges publishing live category-wise subscription figures through the day.
- You bid and authorisePlace the bid, and approve the UPI mandate the same day if you used that route.
- The issue closesThe book is frozen, the final price is discovered from actual demand, and the registrar reconciles every application against PAN, demat and bank records.
- Basis of allotment and unblockingAllotment is finalised and published, funds are unblocked for unsuccessful applicants, and shares are credited to successful ones.
- ListingUnder the current framework listing follows within a few working days of closure, through a special pre-open session that discovers the first traded price.
That compression matters: capital is blocked for days rather than weeks, so the opportunity cost of applying is small.
Why applications get rejected
Rejections are rarely about the merits of your bid. They are administrative, and avoidable.
- PAN problems — inactive, a typo, or not linked to the demat account.
- Name mismatch across demat, bank and PAN, or applying in a name other than the first holder of a joint demat account.
- More than one application per PAN in a category — duplicates are typically all rejected, not just the extra one. Family members can each apply on their own PAN and demat.
- Mandate not approved in time, or insufficient balance when the block is attempted.
- A bid below the final discovered price — valid, but out of the book. This is the case for using cut-off.
- A quantity that is not a whole multiple of the lot size.
- A third-party bank account, or a frozen or inactive demat account.
Applying is a process, not a strategy
Knowing the mechanics stops you losing an allotment to a paperwork error. It tells you nothing about whether to apply. The common path is to learn the process, then pick issues on subscription figures and an unofficial grey market number — a framework with no analytical content at all. If that sounds familiar, read what IPO GMP really is first.
And keep the size of it in perspective. A retail allotment is small by design, and should be judged like any other position against your existing concentration and sector exposure. AIVITTA is an analytics and education platform, not an advisor: we do not recommend applying to any issue, and every decision remains yours.