An IPO (Initial Public Offering) is when a private company decides to sell its shares to the public for the first time. This helps the Initial Public Offering companies raise money to grow while giving private investors a way to liquidate their holdings. Post an IPO, the shares of a company get listed on the stock exchange for the first time.
Companies go public to raise money for expanding their business, paying off loans, or starting new projects. It also helps them become more visible and lets early investors sell part of their shares.
In a fixed price issue, the company sets a share price that does not change, even before the IPO opens. In a book-building issue, they set a price range, and you can place your bid within that range. The final price is decided after checking how much demand there is.
The price band is simply the minimum and maximum price range for bidding in a book-built IPO. The cut-off price is the final rate within that range where shares get allotted, depending on how much demand there is.
Lot size is the minimum number of shares you can apply for. You can get shares only in multiples of this. For example, if one lot is 50 shares, you can apply for 50 shares, 100 shares, 150 shares, and so on.
The eligibility criteria for IPO, as per investor categories, are given below:
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Yes, PAN is mandatory. You don’t need a trading account to apply, but you should open a demat account online, because that’s where your allotted shares will be credited. You actually don’t need a trading account to apply for an IPO. But if you get the shares and want to sell them later, that’s when a trading account becomes necessary.
No, you can’t place multiple IPO applications using the same name or PAN, even if you have different Demat accounts. If you try, all your IPO application processes might get rejected. However, your family members can apply separately using their own PAN and Demat accounts.
IPO allotment happens through a computer-based draw known as the basis of allotment. If there are more applications than shares, the system randomly picks successful applicants based on category quotas.
Look at the company’s financial strength, business model, how it plans to use the funds, and its management background. You might check the grey market prices for IPO performance analysis as well.
If you don’t get allotted, your blocked funds are released back to your bank within a few working days. However, you must check IPO allotment details if you are applying for any.
You can easily track and apply for upcoming IPOs on Finnpick Read More →
No. Every valid application goes through a computerised draw system, which ensures a completely random and fair selection process. So, if you apply in the first hour or on the last day, your chances remain the same.
No, applying for an IPO doesn’t mean you’re guaranteed to make money when the shares hit the market. Sometimes you can earn quick profits from “listing gains,” but there’s also a risk the share price could drop. So, you might end up losing money instead.
Indian residents, NRIs, mutual funds, and institutional buyers can apply following SEBI’s rules.
Yes, you need both an online demat account and a PAN card to apply for an IPO. Your demat and trading account is where the shares will be stored if you get an allotment, and your PAN helps verify your identity.
The ASBA (Applications Supported by Blocked Amount) process lets investors apply for IPOs, FPOs, and rights issues without immediately paying the application amount. Instead, the funds remain in the investor’s bank account but are temporarily blocked until the share allotment is completed. This makes sure that money is only debited if shares are allotted.
You can check the status on the Finnpick allotment page or on stock exchange or registrar websites (like Link Intime or KFintech). Also, you need your PAN or application number to see if shares are allotted.
Yes, NRIs come under the IPO eligibility criteria. They can invest using NRE/NRO accounts linked with PAN and Demat.
Yes. Minors can apply through their guardian using the minor’s PAN and Demat details. Minors above 15 years of age can apply using UPI through their stock brokers as well.
They’re large institutions like mutual funds that buy shares before the IPO gets listed on the share market. Their early participation builds trust among other investors.
A Draft Red Herring Prospectus (DRHP) is the first version of a company’s IPO document that’s shared with SEBI for review. It tells you everything about the company like what it does, its finances, risks, and how it plans to use the money it raises. After SEBI checks and approves it, the company releases the final version called the Red Herring Prospectus (RHP), which you can read before deciding whether to invest in the IPO.
Look at the company’s finances, IPO date, size, promoters, and how it plans to use the money made from this IPO. It will help you see how company details affect the latest IPO allotment status. The offer documents also discuss the strengths and risks associated with the business. A comprehensive analysis of the offer documents is key to optimal investing.
It’s a rating given by SEBI-approved agencies showing how strong or risky the company’s fundamentals are. You can use the best IPO analysis website, like Finnpick, to get a comprehensive overview of an IPO.
Every IPO carries a bit of uncertainty. Sometimes companies launch at high valuations, and the market may not agree with that price later. Moreover, a business has its inherent strengths and risks, which are discussed in the offer documents and summarised in FinnPick IPO analysis.
No, applying for an IPO doesn’t promise a listing gain, and getting the shares isn’t guaranteed either. Even if demand is high, the actual listing price depends on several factors like the company’s valuation, market conditions, and how the company performs in the future.
A fresh issue means the company is issuing new shares to raise extra funds for its business. An Offer for Sale (OFS) occurs if promoters or investors sell their shares and liquidate their holdings.
A lock-in period is the minimum time promoters must hold their shares after the company gets listed. Usually, it’s 18 months. This rule builds confidence that promoters believe in their business and aren’t exiting right after the IPO.
In a book-built IPO, the company sets a price range and investors place bids for the number of shares they want within that range. Once bidding closes, all bids are analyzed to see where demand is highest. The final issue price is then set as per this demand, usually at a level where most shares can be sold. This way, the price reflects real market interest and makes sure fair allocation is given to investors.
If an IPO is under-subscribed, the company may extend the issue dates or adjust the price. Sometimes, the issue may be cancelled.
When more people apply and the subscription exceeds the total shares available, the IPO would be called oversubscribed. In that case, allotment happens either proportionately or through a random draw.
Grey Market Premium, or GMP, is the extra amount investors are ready to pay for IPO shares before they list. For instance, if an IPO is priced at ₹850 and someone offers ₹1,150 for it, the current IPO Grey Market Premium Read More →
Yes, you can. Once the shares start trading on the exchange, you can sell them, but only when markets are open. Some investors choose to sell on listing day for higher profits, while others don't sell for long-term returns.
No special tax rules apply to IPO shares. They’re treated just like any other stock. If you sell within one year, your profit is considered short-term. It is taxed at 20%. If you don't sell for a year, it’s long-term and is taxed at 12.5%.
If an IPO fails to list, your money is given back to your account. If a listed company later decides to delist, trading stops, and investors are offered a buyback price.
Dilution occurs if a company issues new shares, which increases the total shares in the market. Your personal share count doesn’t change, but your ownership percentage becomes smaller.
Yes, applying online is quick and easy. You can use broker apps like Zerodha, Groww, Upstox, or Angel One, or even your bank’s net banking through ASBA. However, they have different demat account charges, account features, etc. Therefore, FinnPick curates the list of top demat accounts and helps you check IPO live subscription status.
On their listing day, IPO shares can be traded from 10:00 AM to 3:30 PM. Before that, there’s a pre-open session from 9:00 AM to 10:00 AM. Orders are executed immediately once the system closes them. For instance, if it closes at 9:40 AM, your order will be processed around 9:40–9:41 AM, not waiting until 9:45 AM.
No, you can’t use both methods for the same IPO. You can apply through UPI or ASBA, but only one valid application per PAN is allowed. This rule keeps things fair for everyone and avoids duplicate applications.
Your DP ID is an 8-digit code that identifies your depository participant or your stockbroker. It’s part of your 16-digit Demat account number and is needed when you fill out an IPO form manually. This ID is created by the depository where your Demat account is registered on either NSDL or CDSL.
There’s no guaranteed way to get 100% allotment, but you can improve your chances a bit. Apply for one application per PAN and always choose the cut-off price. Also, make sure your bid amount matches the lot size, and submit before the deadline. Ensure the information provided is accurate.
If you’re a retail investor (up to ₹2 lakh investment) and the IPO gets oversubscribed, allotment happens through a lottery system. Each valid application stands an equal chance of getting at least one lot.
For sHNIs who invest between ₹2 lakh and ₹10 lakh, allotment happens proportionately. If there are too many applications, you might get only a part of your requested shares based on the overall demand within your category.
For bHNIs investing above ₹10 lakh, allotment also follows the proportionate method. The final number of shares depends on how many people applied in the same category and how big their bids were. So, you can check all IPO allotment status as per this.
If you’re applying for shares worth up to ₹2 lakh in an IPO, you fall under the retail investor category. As per SEBI rules, about 35% of shares in every IPO are set aside for retail investors. Therefore, small retail investors get their fair chance to own shares of the company.
No, you can’t. Your PAN number must match your IPO application process Read More →
You can apply for IPO shares of up to ₹2 lakh only. The actual number of lots depends on the lot size set for that IPO. If one lot costs ₹15,000, you can apply for up to 13 lots (₹1,95,000). Anything above ₹2 lakh moves you into the HNI category. You must check IPO allotment detail...
No, you can’t. Submitting multiple applications with the same PAN number will lead to all of them getting rejected. You should only submit one application per IPO as a retail investor.
Retail investors have their own reserved quota of about 35% of total shares. If the IPO is oversubscribed, you will get allotments as per the lottery system to get a fair chance. Also, check the latest IPO allotment status Read More →
You can use Finnpick to open the best demat account Read More →
In the case of IPOs, an HNI (High Net-Worth Individual) is anyone applying for IPO shares worth more than ₹2 lakh. These investors belong to the Non-Institutional Investor (NII) category, which includes individuals, companies, and trusts that invest above the retail limit.
No, allotment isn’t guaranteed. Shares are distributed on a proportionate basis. If the IPO is oversubscribed, the number of shares you get depends on the demand and total bids received in your category. For better results, always see the latest IPO allotment status Read More →
Yes, the HNI segment is divided into two parts:
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Yes, but only for applications up to ₹5 lakh. For higher amounts, you’ll need to apply using ASBA through your bank’s net banking portal. Make sure your UPI ID is active and linked to your bank account before applying. It keeps the IPO application process Read More →
To apply as an HNI, open a free demat and trading account Read More →
Qualified Institutional Buyers (QIB) are the venture capital funds, insurance companies, banks, mutual funds, foreign investors, and provident funds that hold at least ₹25 crore in assets. These are large financial players who bring confidence to the IPO market.
Up to 50% of the IPO shares are set aside for QIBs. This category includes institutional investors who bid for larger quantities. Shares are allotted proportionately, based on total demand from this segment.
No, QIBs cannot withdraw their applications after submission. However, they can revise their bids upward if they wish to increase their bid amount before the IPO closes.
QIBs play a major role in adding stability to an IPO. When big financial institutions participate, it shows confidence in the company and attracts retail investors and HNIs. Their participation usually strengthens market sentiment.
No, retail investors cannot apply as QIBs. Only registered institutional entities such as banks, funds, or insurance companies that meet SEBI’s eligibility guidelines can bid under the QIB category.
Anyone who already owns at least one share of the company before the open date mentioned in the prospectus can apply under the shareholder category.
This includes individual investors, HNIs, employees, and Hindu Undivided Families (HUFs).
Yes, there is. Many IPOs reserve a special quota (around 5% to 15%) just for existing shareholders of the parent or group company. This quota is a way of rewarding loyal shareholders who have supported the company before it went public.
The record date mentioned in the IPO’s Red Herring Prospectus (RHP) is your key to eligibility. Only those who hold shares in their demat account on or before that date fall under this IPO eligibility criteria Read More →
Yes, they can. As a shareholder, you’re free to apply in the retail and shareholder categories. The only thing to remember is that your total investment across both categories must not exceed ₹2 lakh if you’re applying as a retail investor.
No, it’s not guaranteed. Even though there’s a reserved quota, allotment depends on how many people apply under the shareholder category. If the quota is oversubscribed, you will get the allotment through a lottery system or on a proportionate basis. So, always check the IPO status allotment. Read More →
Applying as a shareholder is simple and follows the same process as any other IPO. You can apply through ASBA (via your bank’s net banking) and UPI-based platforms. When you apply, make sure to select ‘Shareholder Category’ in your IPO application. Also, use the same PAN and demat account that contains the company’s shares.
Employees who can apply under this category are full-time, permanent staff of the company going public (or sometimes its subsidiaries), and currently on the payroll. Contract workers, temporary staff and ex-employees are generally not eligible. Usually, only Indian resident employees qualify.
Companies reserve up to 5% of their post-issue paid-up capital for employees. In the mainboard IPO, each employee’s investment limit is up to ₹2 lakhs under the retail category. Also, if applying through the NII category, it should be from ₹2 lakhs to Read More →
Yes. Some IPOs offer employees a discount on the issue price as an incentive, though this discount isn’t mandatory and varies company by company.
Yes, employees can use the same demat account to apply for an IPO under both employee and retail categories Read More →
No. Only current and active employees on the company's payroll as of the record date are eligible for the employee quota. If you don’t work in the company before their IPO filing or record date, you do not qualify.
Large institutional investors, like mutual funds, insurance companies, pension funds, etc., who commit to purchasing shares of the initial public offering companies before the IPO opens to the general public, are called Anchor Investors. Anchor investors are a subset of the Qualified Institutional Buyers. An anchor investment before IPO opening helps boost market confidence and gauge market anticipation of the IPO.
There is a 30-day lock-in on 50% of the IPO allotment to anchor investors, while the remaining 50% is locked in for 90 days. The lock-in ensures price stability by restricting immediate liquidation and profit bookings by large investors.
Investors need a demat and trading account to apply for an IPO online. Don’t forget to visit FinnPick and compare the brokers that offer free account openings, zero brokerage, cash incentives, and more for demat and trading account openings. Get the best demat account today.
Yes, investors can start their IPO application process without UPI, using ASBA. The Application Supported by Blocked Amount facility is available on the net banking portal of banks. This feature blocks the application amount in the account of the investors, rather than debiting it immediately. The required amount gets debited after successful allotment.
The ASBA process works through the Self-Certified Syndicate Bank. It allows an IPO application without immediate payment. It blocks the application amount in the account of the investors, rather than debiting it immediately. If the IPO allotment is successful, the required funds are debited; otherwise, it is unblocked.
Investors can use the ASBA facility and apply for an IPO through the net banking portal of their bank. Investors need to specify the units and provide other relevant details. Brokerage platforms can also provide the IPO application process. After specifying the units and other key details, investors can make a payment through UPI or another payment facility. Visit FinnPick and compare the different brokers offering the best demat accounts online.
Yes, IPOs have specific opening and closing dates. Usually, the UPI mandate ends by 5 PM on the opening date. Investors must apply within this window. Check the offer documents or the comprehensive and summarised FinnPick IPO analysis to know about the IPO timeline.
No, investors cannot apply for an IPO multiple times, using the same PAN and UPI. It is against regulations and can result in application rejection.
The applications submitted during the IPO are reviewed, and the allotment is made according to the IPO performance. If an IPO is oversubscribed, the allotment is made on a proportionate basis. After IPO closing, allotments are made in a few working days, post review. The shares allotted are transferred to investor demat accounts, while excess funds (if any) are refunded. Check IPO allotment status online now.
IPO refunds must be initiated within four working days. Investors can check the FinnPick IPO analysis of their desired IPO and check the IPO timeline, which mentions the refund initiation date. Check IPO allotment status online now.
Yes, Investors need a PAN and a Demat account to apply for an IPO. FinnPick allows the Compare Broker features, which provide a one-stop comparative study of top brokers, offering free account opening, zero brokerage and other keen details.
Rules relating to eligibility, maximum and minimum investment limit, percentage of total share pool available for allocation, and much more, differ for different investors, due to the differences in their scale, requirements and more. Therefore, NRIs, employed and other investors have different rules.
A situation where an IPO is allotted but funds are not debited can occur due to technical errors. In such a scenario, allotted shares in the demat account are safe and accessible. However, contact your bank, broker or both to understand the situation. Keep track of the current IPO allotment status online till the issue is resolved.
The IPO opening and closing dates are mentioned in the respective RHP, DRHP and Final Prospectus. Investors can also view the IPO analysis of FinnPick, where the IPO timeline is discussed in detail.
No, IPO application cannot be done in both individual and HNI categories because the eligibility of both is different. Applications under ₹2 Lakhs belong to the retail category, whereas applications of ₹2 Lakhs or above belong to HNI.
National Payments Corporation of India sends the UPI mandate after IPO application submission. It usually arrives within an hour. However, there might be some technical delay. Contact your broker and bank to know more.
Yes, an IPO application can be deleted during the subscription process when the IPO is open. Post the IPO close and share allotment, the application cannot be deleted.
No, according to regulations cannot be cancelled or withdrawn. It can be revised, where investors can increase the application amount. Reduction in bid is also not allowed.
No, there won’t be any loss if an investor does not get allotment. In case of non-allotment, the amount will be refunded within a few business days. Moreover, for ASBA, the bid never leaves the account and remains blocked during subscription. The ASBA funds are unblocked, and the investor can access the money freely in case of non-allotment.
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