IPO Guide — Complete FAQ

An IPO (Initial Public Offering) is when a private company offers its shares to the public for the first time on a stock exchange. The process: Company files DRHP with SEBI → Gets approval (30-75 days) → Sets price band → Opens subscription (3 days) → Allotment via lottery → Shares listed on BSE/NSE. After listing, anyone can buy/sell shares on the exchange.

Step 1: Open Demat + trading account (Zerodha, Groww, Upstox — free). Step 2: When IPO opens, go to IPO section in your broker app. Step 3: Select number of lots, enter bid price (usually upper band). Step 4: Enter UPI ID and submit. Step 5: Approve UPI mandate on your UPI app within 24 hours. Done — money is blocked (not debited) until allotment.

Any Indian resident (18+) with a valid PAN card, Demat account, and bank account linked to UPI. NRIs can also apply through NRE/NRO accounts. No minimum income requirement — you just need enough funds to apply for 1 lot.

Minimum = 1 lot × upper price band. Example: If lot size is 30 shares and price band is ₹480-500, minimum investment = 30 × 500 = ₹15,000. This varies per IPO. Retail investors can apply up to ₹2,00,000 maximum.

Lot size is the minimum number of shares you must apply for. You can only apply in multiples of lot size. SEBI mandates that 1 lot value should be between ₹13,000-₹15,000. For example, if share price is ₹500, lot size = 30 shares (30 × 500 = ₹15,000).

Price band is the range within which investors can bid (e.g., ₹480-500). The lower price is floor and upper is cap. Most retail investors bid at the upper band (cut-off price) to maximize allotment chances. The final issue price is decided based on book building demand.

ASBA (Application Supported by Blocked Amount) means your money is blocked in your bank account but not debited until shares are allotted. If you don't get allotment, money is automatically unblocked. This replaced the old system where money was fully debited upfront.

When you apply for IPO via UPI, a mandate (block request) is sent to your UPI app (Google Pay, PhonePe, BHIM). You must approve this within 24 hours. Once approved, the amount is blocked in your bank. If you don't approve, your application is automatically rejected.

All brokers have similar process: Open app → Go to IPO section → Select the IPO → Choose lots (1 lot recommended for retail) → Enter UPI ID → Submit → Approve mandate on UPI app. Groww has the simplest flow. Zerodha requires Kite login. Upstox is via their app.

Yes — but only one application per PAN. You can apply from different family members' Demat accounts (each has different PAN). Multiple applications from same PAN are rejected. Using multiple brokers with same PAN also counts as duplicate and will be rejected.

You can modify or cancel your IPO application before the issue closes. Go to your broker app → IPO section → Active applications → Modify/Cancel. After the issue closes, cancellation is not possible. If you simply don't approve the UPI mandate, your application is automatically cancelled.

This is the ASBA system. Money stays in your bank earning interest but is "blocked" (can't be used). If allotted, only then it's debited. If not allotted, it's unblocked within 1-2 days. This protects investors from having money stuck for weeks.

Exactly ONE application per PAN per IPO in each category (Retail, HNI). Multiple applications from same PAN are flagged and rejected. To increase chances, apply from different family members' accounts (different PANs).

In retail category: If subscription ≤ 1x, everyone gets shares. If oversubscribed, allotment is by computerized lottery — each PAN has equal chance regardless of lots applied. In HNI category: proportional allotment. In QIB: discretionary by book running lead manager.

If retail subscription is 10x, approximately 1 in 10 applicants gets allotment (via lottery). At 50x, it's 1 in 50. Applying for 1 lot gives the same probability as applying for max lots — so always apply for 1 lot in retail to maximize capital efficiency.

Most likely: IPO was oversubscribed and your PAN wasn't selected in lottery. Other reasons: duplicate application (same PAN), technical rejection (incorrect details), UPI mandate not approved in time, or application made after issue closed.

Typically T+6 working days (T = close date). Day 1-3: subscription. Day 4: finalization. Day 5: allotment, shares in Demat. Day 6: listing on exchange. SEBI is working to reduce this to T+3.

Listing gain = (Listing Price - Issue Price) × Shares. If you got 30 shares at ₹500 and it lists at ₹650, listing gain = (650-500) × 30 = ₹4,500. This is profit if you sell on listing day. Not all IPOs give listing gains — some list below issue price.

Depends on your strategy. If listing at significant premium (30%+), many investors book profit on Day 1. If you believe in the company long-term, hold. Statistics show ~60% of IPOs give positive listing returns, but long-term holding gives better returns for fundamentally strong companies.

Increases when: Strong demand (high subscription), positive GMP, good market sentiment, strong fundamentals. Decreases when: Overvalued pricing, weak market conditions, low subscription, negative news, or sector downturn. The listing price is determined by pure demand-supply on exchange.

GMP (Grey Market Premium) is the unofficial premium at which IPO shares and applications trade in the grey market before listing. If GMP is ₹50 on a ₹200 IPO, expected listing is ~₹250. The grey market is unregulated and operates via dealers/brokers outside the exchange system.

GMP is directionally correct about 70% of the time but not always accurate on exact listing price. GMP can be manipulated, changes multiple times daily, and is heavily influenced by overall market mood. Use as one of many signals — not sole decision factor.

No. GMP is just market expectation, not a guarantee. There have been cases where GMP was ₹100+ and stock listed flat or at discount. Similarly, sometimes GMP is low but stock lists at good premium. Always cross-check with subscription data and fundamentals.

Check our GMP Today page — updated every 12 hours. GMP data is sourced from grey market dealers and aggregated. Remember: GMP can change rapidly, especially 1-2 days before listing.

No investment is fully "safe." IPO risk factors include: new listing with no trading history, possible overvaluation, lock-in of promoter shares, market timing risk. However, SEBI regulations ensure transparency. To reduce risk: research fundamentals, check peer valuations, track subscription levels.

Check: 1) Company revenue/profit growth (last 3 years), 2) Purpose of IPO (growth vs debt repay), 3) Peer comparison (PE ratio vs listed peers), 4) Promoter background, 5) Subscription levels (QIB interest), 6) GMP trend, 7) Sector outlook. Our AI score combines these factors.

Oversubscription means more applications received than shares offered. If 10 lakh shares offered and demand is for 50 lakh shares, IPO is 5x oversubscribed. High oversubscription (especially QIB 10x+) is a positive signal for listing. However, for retail investors, higher subscription = lower allotment probability.

If you don't get allotment, the blocked amount is unblocked within 1-2 business days after allotment date. With UPI/ASBA, money was never debited — just blocked. The bank simply releases the hold. No action needed from your side.

Yes. If sold within 1 year: Short-Term Capital Gains (STCG) taxed at 15%. If held over 1 year: Long-Term Capital Gains (LTCG) taxed at 10% above ₹1 lakh annual exemption. Most IPO investors sell on listing day, so 15% STCG applies to listing gains.

STCG (Short-Term Capital Gains): Profit from selling shares held less than 1 year — taxed at flat 15%. LTCG (Long-Term Capital Gains): Profit from selling shares held more than 1 year — taxed at 10% on gains exceeding ₹1 lakh (no tax on first ₹1 lakh gain).