The 10 ways to invest in an IPO in India (detailed)
Below are 10 different methods you can use to subscribe to an IPO. For each method, I’ll explain what it is, how to do it step-by-step, who it’s best for, and the pros and cons.
1) Bank netbanking ASBA (online) — classic and widely accepted
What it is: Use your bank’s internet banking portal (ASBA facility) to apply. The bank acts as a Self-Certified Syndicate Bank (SCSB) or routes your application to one. Your funds are blocked in your account until allotment. This is the traditional route recommended by regulators.
How to apply (step-by-step):
- Log in to your bank’s internet banking.
- Locate the “Investments / ASBA / IPO” section (varies by bank).
- Select the IPO, enter PAN, demat account number, and bid quantity/price (or “cut-off” if allowed).
- Confirm and submit. The bank blocks the required amount in your account.
- If you used non-UPI ASBA, no UPI mandate is necessary; for UPI ASBA, you’ll approve the mandate in your UPI app.
Best for: Investors who prefer to deal with their bank and want high reliability. It’s good for those who do not use trading apps.
Pros: Highly secure, bank-backed, widely available, compliant with SEBI.
Cons: The interface differs by bank and may be slower than app flows; some banks have clunky navigation.
2) Broker trading app or web platform (UPI or ASBA) — easiest for most retail investors
What it is: Apply through your broker (Zerodha, Groww, Angel One, HDFC Securities, etc.). Most brokers let you apply using UPI ASBA or other ASBA methods directly from their app or website. This is the most popular route for retail investors online.
How to apply (typical steps):
- Log in to broker app/website and go to the IPO section / Bids.
- Select the IPO, choose the investor category (Retail/HNI), and enter quantity.
- For UPI ASBA: enter and verify your UPI ID; a mandate will come to your UPI app to block funds. For non-UPI ASBA, the broker uses bank or ASBA channels.
- Submit and approve the mandate on your UPI app (accept before 5 PM on closing day typically).
Best for: Active retail investors with a demat and broker account.
Pros: Fast user experience, mobile notifications, integrated allotment, and demat credit checks. It often shows issue details and RHP.
Cons: If the broker’s interface or mandate fails, the application may be rejected. Ensure your UPI ID is correctly linked to your bank account.
3) UPI-only ASBA via UPI apps and broker or syndicate channels (fast and mobile-first)
What it is: The UPI ASBA flow uses a one-time mandate in your UPI app (GPay, PhonePe, Paytm, BHIM). The broker or syndicate initiates a UPI mandate which you approve in the UPI app. SEBI allows retail investors to use UPI for IPO payments with a ₹5 lakh limit per transaction.
How to apply:
- From the broker or app, choose the UPI payment option and enter your UPI ID.
- Submit your application. You will receive a UPI mandate request on your UPI app.
- Approve the mandate; funds are blocked. If not allotted, funds are released automatically.
Best for: Mobile users who want quick confirmation and convenience.
Pros: Fast and seamless for mobile users; widely supported by brokers.
Cons: ₹5 lakh per transaction cap (SEBI rule); only retail individuals can use the UPI method, not QIB/HNI.
4) Bank branch or paper ASBA form (physical) — for less tech-savvy or older investors
What it is: Fill out a paper ASBA application form at a designated bank branch (SCSB) or submit it physically through syndicate members. It’s still an accepted route and sometimes preferred by those who want physical records.
How to apply:
- Get the ASBA form from the bank, issuer, or exchange website.
- Fill in your PAN, demat number, and bid quantity/price. Submit it to the bank branch, which will block funds.
- Keep the stamped acknowledgment.
Best for: Investors uncomfortable with online processes or without netbanking or UPI.
Pros: Provides a tangible receipt and a traditional channel.
Cons: Slower, requires physical travel, and there’s a risk of human error in filling out forms.
5) Apply via the Registrar or RTA portal (online or offline)
What it is: Some issuers allow direct applications via the Registrar to the issue (for example, Link Intime, KFintech, Skyline). A registrar may accept ASBA applications (online or physical) or route them to designated banks.
How to apply:
- Visit the registrar’s IPO page (link provided in IPO prospectus or RHP).
- Follow their specific online application instructions (if available). Otherwise, download the ASBA form and submit according to the instructions.
Best for: Those who want to deal directly with the RTA or when their broker does not support a specific issue.
Pros: Direct access to the issuer’s agent; usually reliable.
Cons: Not all issues support full online RTA applications for retail investors
6) e-IPO (Exchange eIPO platform), apply through the stock exchange systems
What it is: Stock exchanges (NSE/BSE) operate e-IPO platforms that members, brokers, and Demat participants use to upload bids. Some exchanges offer interfaces for investors or connect through brokers. SEBI and the exchanges manage e-IPO systems for standardized processing.
How to apply:
- Typically accessed through a member (your broker, bank, DP, or syndicate) that utilizes the exchange’s e-IPO interface to place bids on behalf of clients.
Best for: Institutional investors and brokers; retail investors apply indirectly through their broker.
Pros: Standardized and used by market intermediaries.
Cons: In most cases, there is not a direct web portal for retail investors; retail investors rely on brokers who connect to e-IPO.
7) Apply via your Depository Participant (DP) portal or branch
What it is: Some DPs, which maintain your Demat account, offer IPO application options through their user portals or branch services. They can route ASBA instructions using the client’s bank details.
How to apply:
- Log in to your DP’s portal (if supported), select IPO, and follow the ASBA/UPI process; or visit the DP branch to submit the form.
Best for: Investors who prefer working with the company managing their Demat account (DP) instead of a separate broker or bank.
Pros: Direct link between the Demat and application reduces errors in Demat details.
Cons: Not all DPs provide convenient online options; you may still need to use bank ASBA.
8) Apply as an NRI (NRE/NRO demat route) — separate rules but same ASBA guidelines
What it is: NRIs can apply for Indian IPOs using NRE/NRO bank accounts and an NRI demat/trading account. ASBA is mandatory, the same as for residents. There are specific forms and repatriation rules to consider; in some markets (for example, NRIs in the USA/Canada), there may be restrictions on certain financial products. Check with your bank, broker, or RTA for NRI-specific forms.
How to apply:
- Ensure you have an NRE/NRO bank account and NRI demat & trading account with a SEBI-registered broker.
- Follow your broker’s NRI IPO application process; use ASBA through your bank’s NRE/NRO online banking or broker NRI portal.
Best for: NRIs who want access to the primary market.
Pros: NRIs have equal access to domestic investors, subject to rules.
Cons: Additional paperwork, possible country-specific restrictions, and tax/repatriation rules to consider.
9) Apply through offline syndicate members or lead managers (offline financial intermediaries)
What it is: The lead manager or syndicate members (merchant bankers, broker group offices) accept offline applications and route them to the SCSB or exchange. This option is helpful if you want personal assistance or corporate connections.
How to apply:
- Contact the lead manager’s local office or a listed syndicate member, fill out the ASBA form, and submit it.
Best for: Investors needing guidance or institutional investors working with syndicates.
Pros: Personal assistance, suitable for large or complex applications.
Cons: May take longer; there is a chance of manual data errors.
10) Buy on listing day (secondary market), a way to get IPO shares without subscription
What it is: If you miss the primary subscription or prefer not to bid, you can buy on the listing day or later on the exchange after shares are listed. This is not an IPO subscription but a practical way to gain exposure.
How to do it:
- 1. Wait for the listing announcement or listing date mentioned in the prospectus or on exchange pages.
- Place a regular buy order on NSE/BSE once trading begins (prices can be volatile on listing day).
Best for: Investors who want to avoid uncertainty in allotment or prefer market pricing.
Pros: Instant purchase; you set the price and timing.
Cons: You may pay a premium on listing day (or see a drop); you miss potential discounts from allotment.
Important regulatory points you must know
- ASBA is the SEBI-mandated mechanism for public issues. Your funds are blocked, not transferred, until allotment. This is the central regulatory requirement.
- UPI mandate limit. UPI ASBA is currently capped at ₹5 lakh per transaction for retail investors. Only retail individuals can use UPI payments for public issues. Be aware of this limit.
- Investor categories. IPOs have quotas for different categories (RII, HNI, QIB), and most retail cutoffs depend on the issue document. Check the RHP/Draft Red Herring Prospectus.
- NRIs. NRIs can apply but must use NRE/NRO accounts and comply with bank and depository requirements. See SEBI investor materials and bank NRI IPO guides for details.
- Allotment and listing timelines. SEBI and exchanges set the timelines for listing and the allotment process. Recent changes have shortened listing timelines (for example, to T+3 in some cases). Check for exchange and regulatory updates on current rules.
Practical checklist before you apply
- PAN: Have a valid PAN linked to your demat account.
- Demat and Trading account: Ensure your demat account is active and that your KYC is up to date.
- Bank account: If using UPI, your UPI ID must link to the bank account you want to use. For netbanking ASBA, ensure you have enough funds available to be blocked.
- Correct Demat ID: Enter the exact 16-digit demat number. Any mismatch could lead to rejection.
- Check investor category: Decide whether you are Retail, HNI, or QIB and bid accordingly.
Common mistakes and how to avoid them
- Wrong UPI ID or third-party UPI. Only use the UPI ID linked to the applicant’s bank account. Using a third-party UPI ID can lead to rejection.
- Typo in the demat number or PAN. Double-check your information before submitting.
- Applying multiple times in the same category. This can lead to penalties or rejections if not done correctly. Avoid submitting duplicate applications unnecessarily.
- Missing mandate approval. For UPI ASBA, you must approve the mandate on time (before the broker’s cut-off) or your application will fail.
FAQs
Q: Is ASBA mandatory for IPOs?
A: Yes, SEBI requires ASBA for public issue applications, meaning funds are blocked until allotment.
Q: Can I use UPI to apply for any amount?
A: No. UPI ASBA currently has a ₹5 lakh per transaction limit and is only available to retail individual investors. Check for updates from the exchange or SEBI.
Q: How do I check IPO allotment?
A: Visit the registrar’s allotment page (using your PAN or application number), check your demat account for share credit, or see BSE/NSE allotment status pages.
Q: Can NRIs apply for IPOs in India?
A: Yes, NRIs can apply using NRE/NRO accounts and an NRI demat/trading account, following SEBI and RBI rules. Some jurisdictional restrictions may apply (for example, NRIs in the USA or Canada); confirm with your broker.
Step-by-step recommended approach for a first-time retail investor
- Open a demat and trading account with a reputable broker if you don’t already have one.
- Read the IPO prospectus (RHP). Focus on important details such as the price band, lot size, reservations, and objectives.
- Choose a method: Use a broker app with UPI ASBA for speed.
- Ensure your PAN, demat ID, and UPI ID are ready and match your bank account information.
- Apply before the IPO closes and approve the UPI mandate promptly.
- After allotment, check the registrar or your demat account for share credit. Decide to sell or hold based on your plan.
- Always read the prospectus before applying. It outlines risks, use of proceeds, and promoters.
- Submit one clean application per category unless you are deliberately applying in different categories per prospectus guidelines.
- For small retail investors who prefer to avoid short-term market swings, consider buying on the listing day after assessing market price actions