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IPO application is the process of applying for shares offered in an initial public offering. An investor may apply for IPO shares when the public issue is open.
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An IPO application is a way to submit bids for an initial public offering. Investors who wish to invest in an IPO must submit their bids as soon as the issue is open and before it is closed for subscription. The process of applying for an IPO is also known as the IPO bidding process.
In India, you can submit bids for an IPO in two ways:
Online IPO applications can be submitted through the online facility offered by banks (netbanking, mobile banking apps) and stock brokers. UPI or ASBA is used as the payment option.
Offline IPO applications can be made by submitting the physical IPO application form to the broker or the nearest bank branches that accept IPO applications.
The IPO application process can be carried out through brokers, exchanges, and self-certified syndicate banks (SCSBs) using UPI and ASBA facilities.
Investors may submit only one IPO application per PAN number. If more than one application is submitted under the same PAN number, all applications under that PAN number will be rejected. This rule may or may not apply to IPO applications in the employee and shareholder categories.
IPO Application Procedure
When applying for IPO shares, the investor must choose the investor category. Each category has its own reserved quotas and allocation mechanisms. An investor may apply for an IPO in any one of the following categories:
| Investor Categories | IPO Application Limit |
|---|---|
|
Retail Individual Investor (RII) |
Up to Rs 2 lakhs |
|
Non-Institutional Investor (NII) |
Small NII: More than Rs 2 lakhs to Rs 10 lakhs Big NII: More than Rs 10 lakhs |
|
Qualified Institutional Buyer (QIB) |
Anchor Investors: More than Rs 10 crores No specified limit specified for other QIB |
|
Employee (EMP) |
As defined in RHP document. |
|
Shareholders |
As defined in RHP document. |
As per regulations, there should be one application per PAN. Thus, an investor cannot bid in multiple categories. An individual investor can bid either as an RII, or sNII or bNII. If the investor applies across multiple categories as per below, their application would get rejected
However, if an IPO has additional reserved categories like Employee and Shareholder, an investor can bid across multiple categories and such applications will not be accounted as multiple bids. Let us have a look at all such scenarios and combinations in which an investor can apply and the respective limits.
An investor can apply for more than one IPO application category by using the same PAN number from a bank account or UPI ID. Here are the rules for multiple IPO applications from one account. Check... how to apply for multiple IPO applications?
| IPO Application Options | Maximum Bidding Limits | Bidding at Cut-off Price Allowed? |
|---|---|---|
|
Only RII |
Up to Rs 2 lakhs |
Yes |
|
Only sNII |
> Rs 2 lakhs up to Rs 10 lakhs |
No |
|
Only bNII |
> Rs 10 lakhs upto the NII reservation portion |
No |
|
Only shareholder |
Up to shareholder reservation portion OR up to Rs 2 lakhs as mentioned in the RHP document. |
Allowed only if bidding amount is upto Rs 2 lakhs |
|
Only employee |
Up to Rs 5 lakhs OR up to Rs 2 lakhs as mentioned in the RHP documents. |
Yes |
|
Employee + Shareholder |
|
Yes |
|
Employee + Shareholder + RII/NII |
|
Yes for shareholder/employee/RII |
|
Shareholder + RII/NII |
|
Yes for shareholder/RII |
|
Employee + RII/NII |
|
Yes for employee/RII |
Note: In certain cases, employees are given discount if bidding amount is up to Rs 2 lakhs. Check the details in offer document before applying.
An IPO remains open for a minimum of 3 days and a maximum of 10 days. Stock exchanges accept subscription applications between 10:00 a.m. and 5:00 p.m. on days when the IPO is open for subscription, except on stock exchange holidays.
Most banks and stock brokers allow investors to submit IPO application any time (24 hours) when the IPO is open for bidding. Although the application may be submitted at any time, it will not be forwarded to the exchange until 10:00 a.m. the next day.
The deadline for submitting the IPO application on the last day varies by bank or broker, as they need buffer time to send applications to the exchange before 5:00 p.m. The online application ASBA IPO closes for retail investors at 2 p.m. at SBI Bank, 3 p.m. at ICICI Bank, 3 p.m. at HDFC Bank Net Banking, 3 p.m. at Axis Bank and 2 p.m. at Kotak Bank.
Timing for IPO application
Check cut-off time for ASBA IPO Application (on Last Day) by the banks.
The bank or stockbroker doesn't charge investors for participating in an IPO. They receive a commission from the issuing company for processing the IPO application.
The stockbroker also charges a brokerage fee if the customer sells the IPO shares allotted to him. Some stock brokers, such as Zerodha , offer stock delivery trading with no brokerage fees, so investing in an IPO is completely free.
An IPO application form is a two-page document that contains information about the applicant, offer, and counterparty on the first page and instructions on the second page. It is only required if an investor wishes to make their offers offline. In the case of online IPO applications, the application data is transmitted by the broker/bank to the exchange via an API.
Each application form has a unique application number and space for the stamp/code/serial number of the intermediary where the form is submitted.
The IPO application forms can be downloaded by investors in PDF format from the BSE and NSE websites.
The IPO application number is a unique reference number assigned to each transaction of the IPO application. The IPO application number helps investors verify the status of their application and the allotment status.
For online bids, the IPO application number is generated as soon as the application is submitted to the exchange by the bank/broker (between 10:00 am and 5:00 pm).
For paper forms submitted, the IPO application number is pre-printed as Bid cum Application form No. on the IPO application form.
| Ways to Apply in IPO | IPO Bidding Rules |
|---|---|
|
IPO application from two Demat account |
Not Allowed |
|
IPO application on same name from different bank account |
Not Allowed. |
|
IPO application from joint bank account |
Allowed provided the applicant is the first holder. |
|
IPO application through google pay |
Allowed via UPI |
|
IPO multiple application on same name in an IPO |
Not Allowed |
|
IPO application through Whatsapp |
Allowed provided your broker offers this facility. |
|
IPO application through Phonepe |
Allowed via UPI |
|
IPO duplicate application |
Not allowed |
The investor can check the status of his IPO application once the bank/broker has submitted the bids to the exchange.
If the bid was submitted online through the broker, you can check the IPO bid status through the broker's website/mobile app in their IPO section. There is a tab there that reflects the status of your application.
If the bid was submitted offline, you will need to check the status with the respective broker/bank.
The status of your application can be either of the following:
You can also verify the status of your bid on the NSE or BSE website.
The NSE provides an IPO application verification tool that allows investors to verify IPO application details uploaded on the exchange and also check the allotment status once available. Investors must register once with their PAN information and can then view IPO application details for registered PAN.
If the investor wishes to amend his offer details, he should contact the bank/broker through which he has submitted his application before the closing of the issue. The IPO application details on the NSE website is available until 6 days after the closing of the offering.
The BSE also offers investors the ability to check the status of their applications online. Access the BSE IPO application check link and enter the name of the issue, application number or PAN number. Confirm that you are not a robot, and submit the application.
You can check the status of the IPO application on the website or app of the broker/bank where you applied for the IPO. You can also check the status of your application on the website of the NSE and the BSE.
The allotment status of an IPO application is available on the Registrar's website. The link to check allotment status can be found on Chittorgrah.com
For an offline IPO application, investors may obtain an IPO application form from one of the following intermediaries:
An IPO application number will be generated once the bid has been submitted to the Exchange via the selected online mode. However, if you submit your bid offline, you will find the application number pre-printed on the physical IPO application form as the bid cum application form number.
If the bid is submitted via the brokerage platform/net banking, you will find the IPO application number in the bid history or on the "Status" tab of the desired IPO in the "IPO" section.
A PDF form can be downloaded from the NSE or BSE websites for offline IPO application.
Steps to download IPO application form from NSE:
Note:
Steps to download IPO application form from BSE
An online IPO application with a bank/broker only requires filling out a few fields. It takes less than a minute to complete and submit an online IPO application.
Steps to fill an IPO application form:
Yes, you can apply for an IPO in the HNI category in the same way as in the retail category. The only thing you need to note is that you need to select 'HNI' as the investor category in the IPO application form.
A high net worth individual (HNI) is a retail investor who bids more than 200,000 rupees for shares in an IPO. HNI IPO Applications are part of the non-institutional investor (NII) portion.
NIIs are divided into small NIIs (sNIIs) and large NIIs (bNIIs) depending on the amount of subscription. The sNIIs are investors bidding for shares worth between 2 lakhs and 10 lakhs and the bNIIs are investors bidding for shares worth more than 10 lakhs.
An investor may apply for an IPO through any bank account that is in the investor's name, provided the bank supports the ASBA facility. When an investor applies through a broker/bank, the bank account associated with his/her profile is automatically selected. However, when an investor applies offline, he/she can specify any ASBA-supported bank account in his/her name.
Remark:
Stock exchanges accept IPO applications during the IPO subscription period from 10 am to 5 pm. However, many brokers/banks offer the opportunity to submit IPO applications after 5:00 p.m., except on the last day of the subscription period.
If your broker offers this option, you may place your orders after the market closes, once the IPO is open for public subscription. However, the application will only be uploaded to the exchange system by 10 AM next day.
Offline IPO orders can be submitted to the broker at any time during the IPO window before 5 pm on the last day.
An investor may only submit one IPO application per PAN and the demat account used for the application should be in the same name as the PAN.
If you have multiple demat accounts, you may submit the application through any demat account as long as it is in your name as the primary account holder. If you submit the application online through a broker, the demat account associated with your profile is usually selected automatically. However, if you submit the application through net banking or offline, you can enter the details of any demat account in your name.
Note:
No, you cannot apply for an IPO through credit card.
The IPO application can be filed online or offline through either UPI or ASBA. For UPI application, you need to have a UPI ID and for ASBA application, you need to have a bank account with one of the banks that support ASBA services.
No, a demat account is mandatory to submit an IPO application. You must provide your demat account details whether you are submitting an IPO application online or offline. If you receive an allotment in an IPO, the demat account details are required so that the IPO shares can be credited to your account.
Note that the name on the IPO application must match the name of the primary account holder of the demat account used in the IPO application. If this is not the case, the application will be rejected.
You can apply for an IPO at any time (24 hours) during the subscription period by submitting the online IPO application through Netbanking or a broker. While you can complete the IPO application form at any time, exchanges only accept applications between 10 a.m. and 5 p.m. on weekdays except holidays. Outside of exchange hours or on weekends, applications remain with the broker/bank and are forwarded to the exchange at 10 a.m. the next business day.
An IPO is usually open for a minimum of three business days (maximum ten business days). If a Saturday falls within the IPO subscription window, you may submit your application on a Saturday, provided your broker/bank allows you to submit applications outside of IPO opening hours and on weekends. Regardless of when you submit an IPO application, the application will only be uploaded to the Exchange System during IPO market hours of 10 a.m. to 5 p.m.
An IPO application number is a unique number assigned to each IPO transaction. It can be used to verify the status of an IPO application. There is no specific format for the IPO application number.
For online IPO applications, the IPO application number is generated as soon as the application is successfully submitted to the exchange (between 10am and 5pm).
For offline IPOs, the application number is pre-printed on the IPO application form and is referred to as the Bid-cum-Application-Form No.
In a book-building IPO, where the price range is set by the issuing company, an investor can place up to 3 bids.
The investor has the option to submit bids with three different price and quantity combinations - Bid1, Bid2 and Bid3. The chosen price should be within the price range and the quantity should be a multiple of the minimum lot size.
The application amount of the highest bid of the 3 bids will be blocked from the bank account.
The beneficiary account number in the IPO application refers to the DP ID and the account number of the demat account to which the shares are to be credited in the event of an allotment under an IPO.
The beneficiary account should be in the name of the applicant and may be maintained with either an NSDL or CDSL depository.
The use of the cut-off price in an IPO means that the investor is willing to pay the price that the company sets at the end of the book building process.
In book building IPOs where there is a price range to choose from, the IPO cut-off price is the final share price set by the company based on demand for the IPO shares.
Note:
Example:
A company has planned an IPO with a price between Rs 95 and 100. Investors have the option to apply at any price within the specified range. If the cut-off price is chosen, the retail investor will receive an allocation based on the price set by the company, taking into account the demand of QIB, HNI and retail investors who applied at the set price. If QIB and NII have subscribed at a price of Rs 100, the cut-off price will be set at Rs 100.
The IPO application number or PAN number is used to check the IPO application status. The allotment status could be found on registrar's website once the allotment is declared.
You can check the status of IPO application through the trading platform of the broker or the stock exchange (NSE / BSE). You can also check the status with the broker/bank through which you applied for the IPO.
Investors can find IPO application number in the following ways:
The DP name is the name of the depository participant where you have the demat account. Generally, it is the name of the broker with whom you have an account.
Together with the DP name, you must also select the depository NSDL/CDSL whose services you are using. In certain cases, you only need to select the depository and enter the DP ID and client ID details.
DP ID is an 8-digit number of the depository participant with whom you have an account.
Every depository participant (DP) is assigned a number by its depository (NSDL/CDSL). The DP ID of a DP having membership with NSDL starts with IN followed by the client ID whereas the CDSL DP ID contains only 16 numeric digits.
You can apply for IPO offline by submitting the physical IPO application form to the nearest broker, SCSB, Syndicate Member, Registrar and Transfer and Agents (RTA) or DP.
Steps to apply for IPO offline:
Points to Note:
You can apply for an IPO online through the broker's platform or through Net banking. If you want to apply through the broker, you need to have an UPI ID.
Steps to apply for an IPO online through broker:
Steps to apply for IPO online through Net banking (ASBA):
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