Steps to Invest in IPO

November 09, 2022

IPO investing has plenty of benefits. You not only get to participate in the wealth creation process much earlier, but also get the chance to cash in on listing gains. That said, one of the major roadblocks to investing in an IPO is the fact that a large number of investors are simply unaware of how to proceed to invest in one.

With the constant slew of IPOs hitting the Indian stock market at regular intervals, it is important for you to know how to invest in one. Fortunately, you can quickly invest in an IPO by simply following the steps outlined below. 


Step 1: Open a demat account 

The first thing that you need to do before even thinking about investing in an IPO is to open a demat account. A demat account is an electronic account that is used to safely store securities like shares, bonds and debentures. And according to the rules of the Securities and Exchange Board of India (SEBI), having a demat account is a mandatory prerequisite for investing in the stock market. 

Now, if you already have a demat account, you can skip this step and proceed to the next one.


Step 2: Ensure that you are well-funded 

Once you’ve opened a demat account, the next step is to ensure that you have the funds required to invest in the IPO of your choice. Since all IPO applications these days are done through a UPI mandate, it is crucial that you hold funds in an account that is linked to UPI.   


Step 3: Apply for the IPO you wish to invest in 

Upon ensuring that your account is well-funded, the next step is to proceed to apply for the public issue. Now, when it comes to IPO investing, there are two different ways through which you can apply. Here is a quick look at both the processes. 


Online Method

When you open a demat account with a stock broking entity, you would have also opened a trading account. You can apply for an IPO through this trading account by logging into it using your user credentials. Once you’re logged into your account, navigate to the IPO section. 

Here, you should be able to see the different IPOs that you can invest in, along with details of the same. Click on the IPO that you wish to invest in and proceed to complete the application form by entering details like the number of lots and the cut-off price among others. 

At the time of submission, you will be asked to enter your UPI ID to create a mandate. Enter the UPI ID that’s linked to the bank account in which you have the necessary funds and complete the mandate. That’s it! Your IPO application process will now be complete.  


Offline Method

If you only have a demat account and not a trading account or if you prefer to apply for an IPO offline, then this method might just be perfect for you. Apply via this method, all that you need to do is get a physical IPO application form. You get one from a bank branch, a stock broker, or a distributor. Fill all the required details including your personal information, bank account information and demat account information. Submit the application form along with the requisite investment amount. 



With this, you must now be aware of the steps that you would have to follow to invest in an IPO. Remember, having an active demat account is mandatory to invest in one. So, make sure that you have one with you.




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