How to Apply for an IPO Online: A Step-by-Step Guide

In recent years, the percentage of retail investors applying for IPOs online has significantly increased. In 2022, around 70% of retail applications were submitted online. The convenience and accessibility of online applications have driven this trend, with mobile applications playing a crucial role.

The average subscription rate for IPOs in 2023 was 12.6 times, indicating a high demand from investors . Popular IPOs, such as Zomato and Paytm, saw subscription rates of over 40 times, showcasing the robust interest among retail investors. Thus, retail investor participation in IPOs has seen a steady rise, with over 10 million retail applications in 2023, up from 8 million in 2022. This rise can be attributed to the ease of applying online and the strong performance of recent IPOs.

Applying for an Initial Public Offering (IPO) online has become increasingly popular due to its convenience and efficiency. Here’s a detailed guide on how to do it.

Step-by-Step Guide

• Open a Demat and Trading Account:
• Demat Account: Holds your shares in electronic format.
• Trading Account: Allows you to trade in shares.
• As of 2023, there are over 40 million Demat accounts in India.
• Link Your Bank Account: Ensure your bank account is linked to your trading account for seamless transactions.
• Select the IPO: Log into your trading platform and select the IPO you wish to apply for.
• Apply for the IPO:
• Enter Bid Details: Specify the number of shares and the bid price. The lot size and price band are provided in the IPO prospectus.
• UPI ID: If using the UPI method, enter your UPI ID for payment authorization.
• ASBA (Application Supported by Blocked Amount): This method blocks the application amount in your bank account until the IPO shares are allotted.
• Confirm Application: Review and confirm your application details.
• Payment Authorization: Authorize the payment via UPI or ASBA. Once authorized, the amount will be blocked in your account.
• Receive Allotment: If shares are allotted to you, they will be credited to your Demat account. If not, the blocked amount will be released.

With the growth in online applications and the increasing participation of retail investors, it’s clear that the digital approach to investing in IPOs is here to stay. By following the steps outlined above, investors can seamlessly apply for upcoming IPOs and take advantage of new investment opportunities.