How to invest in an IPO?



A company’s initial public offer is the first time a private company raises capital by issuing shares. According to the law, a private company’s number of shareholdersis limited, but a public company can have a maximum number of shareholders. These shareholders will help raise the money required for the operations of the business.

There is a craze for investing in IPOs. Thoughts of listing gains lure in investors. If the company that plans to IPO is a new-age technology firm, then the crowd of investors who want to apply for its shares is even more. They all want quick and considerable returns from their investments.

There are a few basic requirements to apply for an IPO. You need a trading account and a dematerialization (demat) account to invest in shares, but for investing in an IPO, a demat account is enough. This is an electronic record of the shares that you buy and sell. You also need a unified payments interface (UPI ID).

Nowadays, it is easy toapply for an Initial public offering (IPO). It can be done offline and online. Most online brokers and banks have Applications supported by blocked amount ASBA that helps investors easily apply for an IPO.

With ICICI direct, you can open your demat account andinvest in all the upcoming and current IPOs. You can view, among other details, an analysis of the top-performing IPOs, the closed IPOs, and the delisted IPOs.


Application supported by the blocked amount (ASBA)

The Securities Exchange Board of India has also made it easy for you to block the application money required for an IPO.  The regulatory body has made it mandatory for investors to follow the ASBA facility when bidding for an IPO. Your bankwill automatically debit money from your bank account for the shares that are allotted to you. You can directly apply for an IPO via the ASBA facility offered to you by your broker.You do not have to bother about other modes of payment but can block the amount in your bank account. This money will continue to earn interest in your bank. Only an amount equal to the shares allotted to you in the IPO is taken from your bank account. This amount is taken from the bank only when the shares are allocated to you.


A unified payments interface (UPI)is an instant payment system to transfer money between any two parties’ banks. You need to create a UPI id to use it.Retail individual investors and shareholders bidding in shareholders reservation portion of up to Rs.2,00,000 can avail the application via the UPI facility of a bank. Once the investor submits the IPO application, the amount required would be blocked by the bank and debited from the account once the shares are allocated.

How to apply for an IPO using UPI:

  • Enter mobile number
  • Receive a one-time password (OTP)
  • Enter the OTP that pops up on the screen
  • Select the IPO which you are interested in from the drop-down menu
  • Fill in all the required details like your pan card details, demat account number, UPI ID etc.
  • Fill in the bid details
  • Confirm all the details
  • You will be directed to the payment option, and you need to mention your virtual payment address
  • You will then receive a collect request
  • The bid amount will then be marked as a lien in your bank account
  • On allotment of shares, the amount will directly be debited from your account
  • If the shares are not allocated, the amount blocked will be released.

With ICICI direct,you can place a maximum of 10IPO applications with a UPI ID for ten different investors through a single login.


You can avail of the ASBA facility both for online as well as for an offline IPO application. But even in the offline mode, you will need a demat account to invest in the IPO. You need to receive an IPO application form from a bank or a registered and reputed stockbroker. Once you do, you need to fill in the details like your name, your identity card number, the company you want to apply for, the bid details and your demat account number. You need to submit this form to your bank so that funds from your bank account are blocked. These funds are debited when the shares of the IPO you have applied for are allotted to you.


Before investing in an IPO, you need to be aware of several things. You should not be lured into an IPO just by the thought of making a quick profit but consider all the factors and make an informed decision with the help of professionals.


ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 2288 2460, 022 – 2288 2470.Please note, IPO related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.


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