What Is an IPO, and How to Apply in India

An Initial Public Offering (IPO) is the first time a company sells shares directly to the public, moving from privately held to listed on a stock exchange. For investors, applying has become almost entirely digital — no money actually leaves your account unless you're allotted shares, and the whole process from application close to listing now takes just three working days.

Every IPO application in India goes through ASBA (Application Supported by Blocked Amount) — critically, your money is only *blocked* in your bank account, not withdrawn, at the time you apply. Most retail investors today apply through the UPI route: you submit your bid through your broker's app or the exchange's platform, then a mandate request appears in your UPI app (Google Pay, PhonePe, or your bank's app), which you must approve before 5:00 PM on the day the IPO closes. Approving this mandate is what actually blocks the funds — until you approve it, your application isn't confirmed, and a large share of failed retail applications happen simply because investors miss this step in the final hours.

SEBI cut the standard IPO timeline to three working days after the issue closes:

• **T+1**: Allotment is finalized by the registrar — you find out whether you received shares.
• **T+2**: If allotted, shares are credited to your demat account; if not, the blocked amount is simply released back — since nothing was withdrawn, there's no "refund" to wait for in the traditional sense.
• **T+3**: The stock begins trading on the exchange (listing day).

Retail investors bidding at the cut-off price are grouped into lots, and if the retail category is oversubscribed, allotment is done through a computerized lottery system — bidding for a larger number of lots doesn't guarantee more shares, it only affects your odds in the lottery for that many lots. This is worth knowing before assuming a bigger bid amount improves your chances proportionally; for heavily oversubscribed issues, it mostly doesn't.

The RHP (Red Herring Prospectus) is the actual disclosure document — objects of the issue (what the company plans to do with the money raised), risk factors, financial statements, and valuation basis. It's long, but the "Objects of the Offer" and "Risk Factors" sections are worth reading directly rather than relying entirely on secondary commentary, since IPO marketing narratives don't always match what the prospectus itself discloses.

• ASBA/UPI only blocks funds — nothing is withdrawn unless shares are actually allotted.
• Approve the UPI mandate well before the 5:00 PM cutoff on the closing day; last-minute mandates fail more often.
• Listing now happens on T+3 — allotment on T+1, shares credited on T+2, trading begins T+3.
• A bigger bid in an oversubscribed retail category improves lottery odds, not a guaranteed proportional allotment.
• The Red Herring Prospectus, not just IPO marketing, is where the real risk disclosures live.