IPO Using UPI and ASBA

How to Apply for an IPO Using UPI and ASBA in India

Applying for an IPO in India is easier than most people think. You do not need a broker's office or any paperwork. With a demat account, a bank account, and a UPI ID, you can apply for any IPO from your phone in under few minutes.

What You Need Before Applying

Before you apply for any IPO, make sure you have these three things ready:

1. A PAN card - mandatory for all IPO applications
2. A Demat account - shares are credited here after allotment (Zerodha, Groww, Upstox, Angel One, or any broker)
3. A bank account with UPI or net banking enabled - for blocking the application amount

The PAN on your bank account and demat account must be the same. Applications with mismatched PAN are rejected automatically.

Two Ways to Apply for an IPO in India

There are two methods to apply for an IPO in India:

1. UPI Method - through your broker's app (Zerodha, Groww, etc.)
2. ASBA Method - through your bank's net banking directly

Both methods work on the same principle - your money is not debited when you apply. It is only blocked in your bank account. If you do not get allotment, the block is released automatically. You continue earning interest on blocked funds.

Let us understand both methods in detail.

Method 1 - How to Apply for an IPO Using UPI (Through Broker App)

This is the most popular method for retail investors today. You apply through your broker's app and approve the payment mandate via any UPI app (Google Pay, PhonePe, BHIM, Paytm).

UPI limit for IPO: ₹5 lakhs per application (increased by SEBI in 2022)

This means UPI works for retail investors but not for HNI (NII) category applications above ₹5 lakhs.

Step-by-Step: Apply via Zerodha (Kite / Console)

1. Log in to Zerodha Console (console.zerodha.com) or open the Kite app
2. Go to Portfolio -> IPO
3. You will see a list of currently open IPOs -> select the one you want to apply for
4. Enter the number of lots you want to apply for
5. Select Cut-off price (recommended for retail investors - explained below)
6. Enter your UPI ID (e.g. yourname@okaxis or yourname@ybl)
7. Click Submit
8. Open your UPI app (Google Pay / PhonePe / BHIM) — you will receive a mandate request
9. Approve the mandate - your application amount is now blocked in your bank account
10. You will receive a confirmation from the exchange

Important: Approve the UPI mandate within 30 minutes of submitting the application. If you miss it, your application may not be processed.

Same steps apply for other brokers:

• Groww - Go to IPO section -> Select IPO -> Enter lots -> UPI ID -> Approve mandate
• Upstox - Markets -> IPO -> Apply -> Enter details -> UPI mandate approval
• Angel One - IPO tab -> Apply -> UPI payment -> Mandate approval
• Paytm Money - IPO section -> Apply -> Paytm UPI mandate

The steps are almost identical across all broker apps. The only difference is where the IPO section is located in the app.

Method 2 - How to Apply for an IPO Using ASBA (Through Bank Net Banking)

ASBA stands for Application Supported by Blocked Amount. In this method, you apply directly through your bank's net banking - no broker app needed.

This method is useful when:

• You want to apply in the HNI/NII category (above ₹2 lakhs - UPI had a ₹2L limit before 2022, now ₹5L)
• You prefer using your bank directly over a broker app
• You are a minor, HUF, or company applying through net banking

Step-by-Step: Apply via HDFC Bank Net Banking

1. Log in to HDFC Net Banking
2. Go to Accounts -> Request -> IPO / Rights Issue – New
3. Click Continue and enter your account number and PAN
4. Select the IPO you want to apply for from the list
5. Enter your Demat Account details (DP ID + Client ID - get this from your broker app under Profile)
6. Enter the number of lots and select Cut-off price
7. Submit - the application amount is blocked immediately
8. Save your application number as confirmation

Same process for other banks:

• SBI - e-Services -> Demat & ASBA Services -> IPO (Equity) under ASBA
• ICICI Bank - Investments & Insurance -> Invest Online -> IPO Online
• Axis Bank - Investments -> IPO Application
• Kotak Bank - My Investments -> IPO

Note: ASBA through net banking does not require UPI mandate approval. The amount is blocked directly from your account the moment you submit.

What is Cut-off Price and Should You Select It?

When you apply for a book building IPO, the company gives a price band - for example ₹375 to ₹395.

• If you bid at a specific price (say ₹380) and the final price is set at ₹395, your application may be rejected
• If you select Cut-off price, you are agreeing to pay whatever price the company finally decides within the band

Always select Cut-off price if you are a retail investor. It maximises your chances of allotment and is the standard practice.

Online vs Offline IPO Application

Offline applications are still accepted at ASBA-enabled bank branches. You download the IPO form from NSE or BSE websites, fill it manually, and submit it at your nearest branch. However, online is always faster and safer.

Important Rules and Limits

• One application per PAN - you cannot submit two applications for the same IPO from the same PAN number. It will lead to rejection of both applications
• UPI limit - ₹5 lakhs per IPO application via UPI
• Mandate approval deadline - approve your UPI mandate before the IPO closes. On the last day, approve it well before 5 PM
• Demat and bank PAN must match - third-party ASBA applications are no longer allowed since May 2022
• Application window - IPOs are typically open for 3 days. You can apply any time during this window

How to Check if Your Application Was Submitted

After applying, you can check your application status in two ways:

1. Through your broker app - go to the IPO section and check order status
2. Through BSE or NSE website - visit the IPO allotment status page and enter your PAN or application number

You can also track all currently open IPOs and their closing dates on the IPO Rise Ongoing IPO page.

What Happens Next After You Apply IPO?

Once you apply:

1. Subscription closes - IPO stops accepting applications
2. Allotment - shares are allocated (usually 3 days after closing)
3. If allotted - shares are credited to your demat account
4. If not allotted - blocked amount is released back to your bank account within 1 working day
5. Listing day - shares start trading on NSE/BSE

To check your allotment status, visit the registrar's website (link is available on each IPO detail page on IPO Rise) and enter your PAN or application number.

Common Mistakes to Avoid

• Not approving the UPI mandate - most common reason for application failure
• Applying from multiple accounts with same PAN - leads to rejection of all applications
• Entering wrong Demat account details - shares cannot be credited if DP details are wrong
• Bidding at a specific price instead of cut-off - reduces allotment chances
• Applying on the last day at the last minute - UPI mandates can fail during high traffic. Apply 1 day before closing

Key Takeaways

• You need a PAN, demat account, and bank account with UPI or net banking to apply
• UPI method via broker app is the easiest and fastest way to apply
• ASBA via bank net banking is ideal for larger applications or non-UPI users
• Always select cut-off price for book building IPOs
• One PAN = one application per IPO - no exceptions
• Approve UPI mandate promptly - without it, your application is invalid

Check all currently open IPOs on IPO Rise Ongoing IPOs and upcoming ones on Upcoming IPOs to plan your next application.

Frequently Asked Questions

Q. Can I apply for an IPO without a demat account?

No. A demat account is mandatory to apply for an IPO in India. Allotted shares are credited directly to your demat account after allotment.

Q. What is the UPI limit for IPO applications?

The UPI limit for IPO applications is ₹5 lakhs per transaction as of 2022. For applications above ₹5 lakhs, you must use the ASBA net banking method.

Q. Can I apply for the same IPO from two different accounts?

No. Only one application per PAN is allowed per IPO. If two applications are submitted with the same PAN, both will be rejected.

Q. What happens if I do not approve the UPI mandate?

If you do not approve the UPI mandate after submitting your IPO application, your application will not be processed and will be treated as invalid.

Q. When is the blocked amount released if I do not get allotment?

If you do not receive allotment, the blocked amount is released back to your bank account within 1 working day after the allotment is finalised.