What is the minimum amount needed to apply for an IPO?

Typically ₹13,000 to ₹15,000 for one lot in the retail category. The exact amount depends on the IPO's price band and lot size. The maximum retail investment is ₹2 lakh — above that you must apply in the HNI (High Net-worth Individual) category.

How is IPO allotment decided?

If the issue is undersubscribed (rare), everyone who applied gets full allotment. If oversubscribed (common), retail allotment is by computerized lottery — every retail applicant has equal probability regardless of how much they bid. So one application per PAN is enough; multiple applications from the same PAN are rejected.

What happens if I'm not allotted IPO shares?

Your blocked amount in the bank gets released automatically within 1–2 days of the allotment date. The money was never deducted, only blocked — so there's nothing to refund manually. You'll be able to use those funds again normally.

Partially. GMP (Grey Market Premium) gives a sentiment indicator from the unofficial pre-listing grey market. It's roughly directionally accurate (about 70% of the time) but often very wrong on the actual magnitude of listing day moves. Don't apply based on GMP alone — check the fundamentals.

Should I hold IPO shares for the long term?

Depends on the company. Strong businesses with reasonable IPO valuation (Avenue Supermarts, ICICI Bank, TCS at their times) rewarded long-term holders enormously. Overvalued IPOs of weak businesses (LIC, Paytm at issue) underperformed for years. Read the DRHP, check valuations, and only hold long-term if you'd be comfortable buying the stock at the listing price after listing.

How to Invest in IPO in India — Step-by-Step Guide (2026)

An IPO — Initial Public Offering — is when a private company sells its shares to the public for the first time. If you're allotted shares, you become an early shareholder in a company that was previously inaccessible to retail investors. Some IPOs deliver explosive listing gains. Others list at a loss. The applying process itself is surprisingly easy in 2026 — entirely through UPI. Let me walk you through everything from understanding the IPO to checking your allotment and what to do on listing day.

What is an IPO?

When a private company wants to raise large amounts of money — typically for expansion, paying off debt, or letting early investors exit — it can go public. The company hires merchant bankers, files a prospectus (called DRHP) with SEBI, sets a price band, and offers shares to the public for a few days. Anyone with a demat account can apply. After the offer closes, shares are allotted (often by lottery for retail investors) and listed on the NSE/BSE — usually within a week.

There are also FPOs (Follow-on Public Offerings) — when an already-listed company sells additional shares to the public. The process is identical to IPOs from your perspective as an investor.

Documents and account requirements

You need three things to apply for an IPO:

An active demat account — to receive the shares if allotted.
A UPI ID linked to a bank account — for the payment mandate. The amount gets blocked, not deducted, until allotment.
Sufficient balance in the linked bank account — typically ₹15,000 minimum for one retail lot.

Step-by-step IPO application (Zerodha example)

Open the Kite app or Console. Go to the IPO tab.
You'll see live IPOs. Pick the one you want to apply for. Read the basic details — price band, lot size, dates.
Click Apply. Enter the bid price (cut-off is usually best for retail investors), and quantity in lots.
Enter your UPI ID.
Open your UPI app (PhonePe / Google Pay / Paytm) — you'll see a mandate request. Approve it.
Your application amount is now blocked in your bank account until allotment day.

If you don't approve the UPI mandate within the window (usually 24 hours from applying), your application gets rejected. Approve it the same day.

Chart showing typical IPO timeline from announcement to allotment to listing day — Typical IPO timeline: 5 days to apply, 5–7 days to allotment, then listing — about two weeks total.

Understanding the price band and cut-off

IPOs are offered in a price band — for example, ₹170 to ₹180. As a retail investor, you bid for a lot at any price within the band. The most common choice is Cut-off price, which means "I'll take it at whatever the final price is set at." Cut-off is the safest option for retail because it ensures your bid is considered at the final allotment price, whatever that turns out to be.

The minimum application size for retail is one lot, where one lot is shares worth roughly ₹13,000 to ₹15,000. Maximum is up to ₹2 lakh in retail category. Above that you're applying as HNI (High Net-worth Individual) where allotment rules differ.

Understanding GMP (Grey Market Premium)

GMP is the unofficial premium at which IPO shares are trading in the grey market before listing. If the issue price is ₹180 and GMP is ₹100, the grey market expects the stock to list around ₹280 — a 55% listing gain. GMP can be useful as a sentiment indicator. It's not regulated, the prices come from informal dealer networks, and it can be very wrong.

My experience: GMP is correct about direction roughly 70% of the time and correct about magnitude maybe 30% of the time. Use it as a sanity check, not a guarantee.

Don't trade based on GMP alone

Some IPOs with high GMP have listed at a loss. Some with low GMP have soared. The fundamentals of the business and the IPO valuation matter more than what some grey market dealer in Surat is quoting. Read the DRHP summary before applying.

Allotment day — checking if you got shares

Allotment is usually finalized 3 working days after the issue closes. Retail allotments are done by lottery when the issue is oversubscribed. Here's how to check:

Visit the registrar's website (Link Intime or KFin Technologies, mentioned in the prospectus).
Enter your PAN or application number.
If allotted, you'll see the number of shares assigned to you.
If not allotted, the blocked amount in your bank releases automatically within 1–2 days.

Listing day — what to do

Shares get credited to your demat account on listing day morning, usually around 9:30 AM, just before market opens at 10:00 AM. Once listed, you have three options:

Sell at open — book listing gains immediately. Lock in the percentage profit (or loss).
Sell intraday at a higher price — if the stock keeps rising through the day, you can wait and sell later. Risky if it falls.
Hold for the long term — if you believe in the company's business. Many great Indian businesses (TCS, Infosys, Avenue Supermarts) made early IPO investors very rich over decades.

My rule: if listing gain is over 25% on a poor-quality IPO, take it. If listing gain is under 10% on a great-quality IPO, hold. Quality matters more than the listing pop.

How to evaluate an IPO before applying

Don't apply blindly. The minimum checks I do:

Read the DRHP summary — at least the company overview, risk factors, and use of proceeds. 30 minutes of reading.
Check the valuation — what's the PE at the IPO price? Compare to sector peers. If the IPO is priced at PE 80 in a sector with average PE 25, that's expensive.
Check why they're raising — is it for genuine business expansion, or for promoter exit (Offer For Sale)? Pure OFS IPOs are usually less attractive.
Check subscription numbers — by day 3 of the issue. QIB (institutional) subscription above 5× is usually a positive signal.
Check the company's profitability — has it made profit in any of the last 3 years? Profitable companies generally make safer IPOs than loss-making ones.

Track upcoming IPOs

You can see live IPO calendar — both upcoming and recently listed — on the upcoming IPOs page and recent IPOs page of stocks.srjahir.in. Each entry shows price band, issue dates, lot size, and issue size — enough to decide whether to dig deeper into the prospectus.

IPO investing is a fun way to be involved in companies at their public debut. Just don't make it your main investment strategy — index funds and blue chips do the heavy lifting; IPOs are the cherry on top, not the cake.