How to Apply for an IPO Through Your Demat Account

Learning how to apply for an IPO through your demat account takes about five minutes once your accounts are in order, and most first-timers lose their application to avoidable errors, not bad luck. The process is the same on every broker app: pick the issue, bid, approve a payment mandate, and wait for allotment.

What You Need Before You Start

Three things must be in place before the IPO opens, because you can’t fix them mid-bid.

• A demat account to receive allotted shares, since no one can apply for an IPO without one
• A trading account with a broker (Zerodha, Groww, Upstox, Angel One or similar) to place the bid
• A bank account linked to UPI or net banking, which is where your money gets blocked
• A PAN that matches across demat and bank records, because third-party ASBA applications have been barred since May 2022

UPI or ASBA: Pick Your Route

Both routes work on the same blocked-amount principle, so your money stays in your account until shares are actually allotted.

• UPI is the usual route for retail applicants, run through your broker’s app, with approval inside any UPI app
• ASBA runs through your bank’s net banking and suits larger or non-UPI applications
• UPI is capped at ₹5 lakh per application, a limit SEBI raised from ₹2 lakh in 2022
• Applications above ₹10 lakh (big NII) can’t use UPI and must go through ASBA

Know Your Category Before You Bid

Your application size decides which pool you compete in, and the pools are treated differently at allotment.

• Retail (RII): applications up to ₹2 lakh, with roughly 35% of the issue reserved for this group
• Small and big NII (HNI): applications above ₹2 lakh, with about 15% reserved and proportional allotment
• A retail investor stays capped at ₹2 lakh even though the UPI limit is higher
• Small NII applicants can apply between ₹2 lakh and ₹5 lakh through UPI

Applying Through UPI, Step by Step

This is the fastest path, and the whole thing happens inside your broker app.

• Open your broker’s app and go to the IPO section
• Select the open issue and enter the number of lots, since bids must be in lot multiples
• Tick the cut-off price box, which retail applicants are widely advised to use to improve allotment odds
• Enter your UPI ID and submit the bid
• Open your UPI app and approve the mandate request, ideally within 24 hours and well before the issue closes

Applying Through ASBA and Net Banking

Use this if you prefer your bank’s portal or your bid crosses the UPI limit.

• Log in to net banking and find the IPO or ASBA section, usually under investments or e-services
• Select the issue and enter your PAN, depository (NSDL or CDSL), DP ID and Client ID
• Enter the lot quantity and tick the cut-off price
• Confirm, and the bank blocks the amount until allotment is decided

What Happens After You Apply

The timeline is compressed into a few working days under the current T+3 cycle.

• T: the IPO closes
• T+1: allotment is finalised, and you can check status on the registrar’s site or your broker app
• T+2: unused money is unblocked and allotted shares reach your demat account
• T+3: the stock lists and starts trading on the exchanges
• If you aren’t allotted, nothing is debited. The block is simply released

Mistakes That Sink Applications

Most rejections trace back to small slips in the form or the mandate, not the IPO itself.

• Wrong UPI ID, which sends the mandate to the wrong place or nowhere
• Skipping mandate approval, the single most common reason a bid never reaches the exchange
• Insufficient balance, since the full blocked amount must be sitting in the account
• PAN mismatch between your demat and bank records
• Wrong DP ID or Client ID, which stops shares from being credited even if allotted

Applying for a Minor

A child’s IPO application follows the same steps, with a guardian running the account.

• Open a demat account in the minor’s name, operated by a parent or legal guardian
• Apply through ASBA or UPI, with UPI available for minors aged 15 and above
• Use the minor’s own PAN on the application

FAQs

Q1. Can I apply for an IPO without a demat account?

No. A demat account is mandatory, because allotted shares are credited straight into it. You also need a trading account to place the bid and a UPI or net-banking enabled bank account.

Q2. What is the maximum I can apply for through UPI?

UPI allows up to ₹5 lakh per application, though retail investors are still capped at ₹2 lakh in their own category. Applications above ₹10 lakh must go through ASBA instead.

Q3. Why should I choose the cut-off price?

Bidding at cut-off means you accept whatever final price is fixed within the band, which improves your chances of allotment. Retail investors commonly pick it rather than a lower price that might fall outside the final pricing.

Q4. What happens to my money if I don’t get shares?

Nothing is debited, since your money is only blocked, not transferred. After allotment is finalised, the block is released, usually by T+2.

Q5. What if I forget to approve the UPI mandate?

Your bid won’t be placed with the exchange, so you’d miss that IPO entirely. Approve the request in your UPI app within 24 hours and before the issue closes.