Table of content

IPO Application – Apply for IPO

Table of content

How to apply for an IPO online?

The massive success of recent IPOs like Electronics Mart (43.14%), Campus Active (29.66%), and Global Health (23.71%) etc. has fuelled retail interest in applying for IPOs in anticipation of listing gains. But before you apply for an IPO, it is important for you to understand the basics of an IPO, the various types of IPOs you can apply for and finally how to apply for an IPO online. Yes, gone are the days when you had to wait in line with your broker or bank to process your IPO application. With the growth of online share trading and the introduction of ASBA (application supported by blocked amount), you can now apply for an IPO from the comfort of your home, in a hassle-free manner.

What is an IPO?

An initial public offering or IPO is the process through which a company sells its shares to the general public for the first time. With an IPO, a company gets listed on the stock exchange and is available for trading to the common public. It is also an excellent opportunity for prospective investors to become the shareholders of a hitherto privately held company.

IPOs can be of two types - fixed price issue and book building issue. In a fixed price issue, the share price is predetermined by the listing company and the lead managers of the issue. On the other hand, in case of a book building issue, a price band (range) is provided to investors, who can apply at a price they deem fit (between the price band). The application amount is blocked in your bank account courtesy the ASBA facility and in case you do not get allotment, the money is unblocked and available for your use.

Read Also: What is the IPO Process in India?

Prerequisites to applying for an IPO

  • Demat account:

    The first requirement for applying for an IPO is that you must have a Demat account. This is because the allotted shares are in digital form. Hence you will need a Demat account to store the allotted digital shares. Opening a demat account should, thus, be on the top of your 'how to apply for an IPO' checklist.
  • Trading account:

    A Demat account only holds the shares allotted during an IPO. You will not be able to trade these shares without a trading account. Hence, opening a trading account is important if you want to trade the shares allotted during an IPO.
  • Bank account:

    Another prerequisite of applying for an IPO is having a bank account. The application amount for your IPO bid gets 'marked on hold' in your bank account courtesy ASBA. This facility has made the process of IPO investing seamless. It is only after the allotment of shares is complete that the money gets deducted from your bank account. In case you do not get allotment, the amount is unblocked for your use.
  • UPI ID:

    The best way to apply for an IPO is via UPI id. The process is complete within minutes with minimal formalities.
  • Eligibility criteria:

    Knowing the eligibility criteria can help you leverage and increase your chances for an allotment. For example, in most of the IPOs, 20% reservation is maintained for retail investors (whose total bid value is less than ₹2 lakhs). So, if you want to qualify for the retail quota, then you must ensure that your total bid value (price *lots or quantities) is less than ₹2 lakhs. This way you can avoid competing with big buyers like qualified institutional buyers, non-institutional buyers etc. for allotment.

Eligibility Criteria for IPO Application

In India, the eligibility criteria for a company to apply for an Initial Public Offering (IPO) are defined by the Securities and Exchange Board of India (SEBI) and include several financial and operational prerequisites. Here is the eligibility criteria for IPO application online:

  • Financial Health:

    A company must demonstrate financial robustness. Specifically, it should have net tangible assets of at least Rs 3 crore in each of the preceding three years, with not more than 50% of these assets being monetary (like cash or equivalents), unless the IPO involves an offer for sale.
  • Profitability:

    The company should have a track record of profitability, with a net worth of at least Rs 1 crore in each of the last three years. Additionally, it should have reported a pre-tax operating profit of Rs 15 crore or more in at least three of the last five years.
  • Issue Size and Market Capitalization:

    The issue size should not exceed five times the company's net worth as per the most recent financial statements.
  • Track Record:

    Companies need to have a track record of at least three years of operations if the company is the issuer. In cases where a new company has been formed by converting a partnership firm or an existing business, the track record of these entities can be considered.
  • Promoters and Management:

    The promoters and directors should not have been disqualified from the markets, and they should hold at least 20% of the post-IPO equity share capital individually or together. Moreover, they should not be classified as wilful defaulters or have any ongoing major legal issues that might affect the company's operations.
  • Regulatory Compliance:

    The company must comply with all regulatory requirements, including not being listed by BIFR (Board for Industrial and Financial Reconstruction) or having any ongoing insolvency proceedings.

These criteria ensure that only financially stable and ethically managed companies can access the public markets, thereby protecting potential investors and maintaining market integrity. For detailed guidance and latest updates on IPO applications, visiting the official SEBI website or consulting with financial experts might provide additional insights and assistance.

How to apply for an IPO through m.Stock's mobile app or website?

If you are wondering how to apply for an IPO online, here’s a step-by-step guide to applying for an IPO with m.Stock and unlocking a world of investment opportunities:

  • Visit our website at or download the m.Stock mobile app to get started.
  • Open a Zero Brokerage account with m.Stock and complete the account opening formalities.
  • Log in to your account and navigate to the IPO section found under the menu tab.
  • Select the IPO you wish to apply for.
  • Enter the desired number of shares and your bid price.
  • Review your IPO application details and move to the payment section.
  • Choose UPI as your payment method.
  • Enter your UPI ID, then generate and submit the OTP received.
  • Once you enter the OTP, your IPO application process is successfully completed.

Now that you know how to apply for an IPO online, take the next step! Open a Zero Brokerage account with m.Stock, where the benefits extend beyond IPOs. With an m.Stock Zero Brokerage account, enjoy lifetime free trading across various products including IPOs, equity delivery, intraday trading, futures and options, and currencies. Open your m.Stock account today, start trading with zero brokerage fees and apply for IPO online.

What are the benefits of applying for an IPO online?

  • Saves time:

    By choosing to apply for an IPO online, you can save a significant amount of time, which is otherwise spent on physical documentation and visit to the broker.
  • Seamless process:

    The process to apply for an IPO online is user-friendly and hassle-free. All you have to do is follow a few easy steps and make the payment online.
  • Optimal use of funds:

    By using the ASBA facility, you can continue earning interest on the blocked application amount. This is because the application amount is only marked on hold in your bank account and not debited till the allotment of the shares. Hence you do not lose out on any interest income.
  • Safety and transparency:

    When you apply for an IPO online, the entire process is safe and highly transparent. There are various checks to ensure that your application and money remain secure.

Read Also: How to Bid for an IPO – Tips and Tricks

Read Also: How to check IPO Allotment Status?

Frequently Asked Questions

Yes, you can apply for an IPO online either through a brokerage website or via a trading app. This convenient method allows you to complete the entire application process digitally, making it accessible and efficient.

To register for an IPO, open a brokerage account if you haven't already, log in, navigate to the IPO section, select the IPO you're interested in, and follow the prompts to enter your details and submit your application.

Eligibility for an IPO generally includes being an adult with a valid brokerage account. You must also comply with regulatory requirements and meet any specific conditions set by the issuing company, such as minimum investment amounts.

No, you cannot apply for an IPO anytime. IPO applications can only be made during the specific period when the IPO window is open. This period is announced in advance by the issuing company.

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