How to Apply for IPO: Complete Step-by-Step Guide
Applying for IPOs has become incredibly simple with the ASBA (Application Supported by Blocked Amount) and UPI process.
What You Need
Before applying for an IPO, ensure you have:
- Demat Account - To hold allotted shares
- Trading Account - To apply through broker
- Bank Account - Linked for fund blocking
- UPI ID - For instant mandate authorization
- Number of lots
- Bid price (usually at cut-off)
- UPI ID for mandate
- Open your UPI app
- Look for IPO section
- Select the IPO and enter details
- Authorize the mandate
- Lower price band: Minimum price
- Upper price band: Maximum price
- Cut-off price: You agree to any price in the band
- Application Period: Usually 3 days
- Basis of Allotment: Decided within 6-7 days
- Lottery System: For oversubscribed retail portion
- Refund/Allotment: Amount debited only on allotment
- Listing: Shares credited before listing day
- Read the DRHP: Understand the company's business
- Check Valuations: Compare with listed peers
- Promoter Background: Research management quality
- Use of Proceeds: How will the company use funds?
- Don't Chase GMP: Grey market is unofficial
- Multiple applications from same PAN
- Incorrect bank/demat details
- Not approving UPI mandate in time
- Bidding below cut-off in oversubscribed IPOs
Method 1: Apply Through SBI Securities
Step 1: Login to your SBI Securities account
Step 2: Go to IPO section and select the IPO
Step 3: Enter your bid details:
Step 4: Confirm and submit application
Step 5: Approve mandate on your UPI app within 24 hours
Method 2: Apply Through UPI Apps
Many UPI apps like GPay, PhonePe, and BHIM allow direct IPO applications.
Understanding Key Terms
Lot Size: Minimum number of shares you must bid for
Price Band: Range within which you can bid
GMP (Grey Market Premium): Unofficial premium at which IPO shares trade before listing. Not guaranteed.
IPO Allotment Process
Tips for IPO Investing
Common Mistakes to Avoid
Conclusion
IPO investing can be profitable but requires due diligence. Don't invest just because an IPO is popular. With SBI Securities, you can apply for IPOs in just a few clicks with instant UPI authorization.