How to Apply for IPO in India 2026 — Complete Beginner’s Guide

What is an IPO?

An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the general public for the first time and gets listed on a stock exchange such as NSE or BSE. Before the IPO, the company’s shares are only held by founders, early investors (angel investors, venture capital funds, private equity firms), and employees. After the IPO, anyone with a demat account can buy and sell the company’s shares on the stock exchange.

Companies go public for several reasons: to raise fresh capital for expansion (this is called a Fresh Issue), to allow existing investors to exit their positions (this is called an Offer for Sale or OFS), or a combination of both. The distinction matters to retail investors — a pure OFS IPO means no new money enters the company; the IPO proceeds go directly to selling shareholders.

In India, IPOs are regulated by the Securities and Exchange Board of India (SEBI). SEBI sets the rules for IPO pricing, disclosures, allotment, and lock-in periods to protect retail investors. Companies must file a Draft Red Herring Prospectus (DRHP) with SEBI before proceeding with an IPO, disclosing financial statements, risk factors, promoter background, and intended use of proceeds.

Types of IPOs in India — Book Building vs Fixed Price

There are two primary methods for pricing IPOs in India:

IPO Investor Categories — Who Can Apply and How Much

SEBI divides IPO applicants into three categories with separate quotas:

• Retail Individual Investors (RII):Individuals applying for up to ₹2 lakh in an IPO. At least 35% of the issue is reserved for retail investors. Allotment by lottery if oversubscribed.
• Non-Institutional Investors (NII/HNI):Individuals or entities applying for more than ₹2 lakh. 15% of the issue is reserved. No lottery — allotment is proportional to application size (pro-rata basis).
• Qualified Institutional Buyers (QIB):Mutual funds, insurance companies, FIIs, banks, etc. 50% of the issue is reserved. They go through a book building exercise and allotment is discretionary.

For most retail investors, the RII category is where you apply. The ₹2 lakh limit means you can apply for a maximum of ₹2,00,000 worth of shares in any single IPO. Applying for more automatically moves you to the HNI category with different allotment rules.

How to Apply for IPO in India — Step-by-Step via UPI (ASBA)

Since 2019, SEBI has made UPI-based IPO applications mandatory for retail investors applying up to ₹2 lakh. This method is called ASBA (Application Supported by Blocked Amount) via UPI. Here’s exactly how it works:

How to Apply for IPO Through Zerodha

Zerodha is India’s largest discount broker with over 8 million active clients. IPO applications through Zerodha are processed via the Kite platform (web and app):

1. Log in to Kite (kite.zerodha.com) or the Kite app.
2. Click on IPO in the top menu (desktop) or under the “more” section (app).
3. Select the IPO you want to apply for and click Apply.
4. Enter the number of lots and your bid price (choose cut-off price). Enter your UPI ID.
5. Click Submit. You will receive a confirmation on screen and via email.
6. Open your UPI app and approve the mandate request that appears within 30-60 minutes.

Zerodha charges no fee for IPO applications. You can track your application status under the same IPO section in Kite. Zerodha also shows subscription data (how many times the IPO is subscribed) in real time.

How to Apply for IPO Through Groww

Groww has become one of India’s most popular investment apps, particularly among first-time investors. The IPO application process on Groww is slightly simpler:

1. Open the Groww app or website. Go to the IPO section (visible on the home screen).
2. Browse open IPOs. Tap on the IPO you want to invest in.
3. Tap Apply Now. Choose the number of lots and select cut-off price.
4. Enter your UPI ID (Groww also supports using the Groww UPI ID directly).
5. Review and submit the application.
6. Approve the UPI mandate in your UPI app when the request arrives.

Groww also offers an “Instant Apply” feature using your saved UPI ID, making repeat applications faster. Groww is free for IPO applications. The app also shows IPO analysis, GMP data, and subscription status in one place, which is convenient for beginners.

IPO Allotment Process — How It Works

After the IPO subscription period closes, the registrar (usually Link Intime or KFintech) processes all applications and determines allotments. Here is the timeline from IPO close to listing:

Note: SEBI shortened the IPO listing timeline from T+6 to T+3 days in 2023, making it one of the fastest IPO settlement cycles in the world. This means you get your money back (or shares credited) much faster than before.

For oversubscribed retail category IPOs, allotment is done by computerised lottery. Each PAN card (i.e., each person) is eligible for only one application in the retail category. If you apply from multiple demat accounts using the same PAN, all applications will be rejected. However, applying from multiple family members’ demat accounts (each with their own PAN) is legal and a common strategy to improve allotment chances.

How to Check IPO Allotment Status

You can check your IPO allotment status in two ways:

Grey Market Premium (GMP) — What It Is and How to Use It

Grey Market Premium (GMP) refers to the price at which IPO shares trade in an unofficial, unregulated market before the stock is listed on NSE/BSE. This market exists because allotted applicants who want to sell before listing, and non-allottees who want to buy before listing, strike deals directly at a mutually agreed premium over the issue price.

For example: If an IPO issue price is ₹500 and the GMP is ₹200, it means grey market participants expect the stock to list around ₹700 — a 40% listing gain. GMP is tracked by websites like ipowatch.in and ipogmp.com, and most broker apps now display it as well.

How to interpret GMP:

• High GMP (20%+): Strong listing gain expected. Often seen in IPOs with strong subscription and positive sector sentiment.
• Moderate GMP (5-20%): Decent listing expected but no windfall. Fundamentals matter more for long-term returns.
• Zero or negative GMP: Market expects flat or below-issue-price listing. Signals weak demand or overvaluation concerns.

Caution: GMP is speculative and can swing dramatically in 24-48 hours before listing. Applying solely based on high GMP is risky — many IPOs with 50%+ GMP have listed flat or at a discount when sentiment changed. Always combine GMP with fundamental analysis before deciding to apply.

Listing Day Strategy — What to Do After Allotment

Once you receive IPO allotment and shares are credited to your demat account, you have a decision to make on listing day. Here are the most common approaches:

Note on lock-in: Promoters and pre-IPO investors face SEBI-mandated lock-in periods (6 months to 3 years depending on the investor type). Retail allottees and anchor investors have no lock-in — you can sell on listing day itself.

IPO Analysis Checklist — How to Evaluate an IPO Before Applying

Not every IPO deserves your money. Before applying, run through this checklist:

Recent Notable IPOs in India — What Worked and What Didn’t

Looking at recent IPO performance helps calibrate expectations:

The pattern is consistent: IPOs with strong promoter credentials, reasonable valuations relative to peers, fresh issue proceeds used for real growth, and sector tailwinds tend to deliver. IPOs with 100% OFS, stretched valuations, or loss-making businesses with no profitability timeline tend to disappoint.

Frequently Asked Questions