What is an IPO how to apply - Fin Banking Tech

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Introduction

Table of Contents

An Initial Public Offering (IPO) is one of the most searched investment topics in India, especially among beginners looking to enter the stock market. With record-breaking IPO listings in recent years, retail participation has grown rapidly. But the major question remains—What is an IPO, and how can you apply for an IPO online in India in 2025?

In this pillar guide, we break down the complete IPO process, eligibility, investment strategies, allotment rules, mistakes to avoid, and a detailed 2025 step-by-step IPO application method for platforms like Zerodha, Groww, Upstox, and major banks.

This guide is crafted to be beginner-friendly, mobile responsive, SEO-optimized, and accurate—perfect for students, investors, and traders planning to start their IPO investment journey.

Quick Overview / Summary Table

Topic	Details
IPO Full Form	Initial Public Offering
Purpose	Company raises funds by selling shares to the public
Who Can Apply?	Retail Investors, HNIs, Institutions
Minimum Requirement	Demat + PAN + Bank Account
Risk Level	Moderate to High
Application Methods	UPI, ASBA, Net Banking
2025 Trend	More tech, fintech, manufacturing IPOs expected

Important Links

Resource	Link
Official Website	finbankingtech.com
Telegram Channel	Join on Telegram
WhatsApp Support	7905455959
SEBI Website	https://www.sebi.gov.in
NSE IPO List	https://www.nseindia.com

Eligibility Criteria to Apply for an IPO in India (2025)

✔ Valid PAN Card
✔ Active Demat Account
✔ Linked Bank Account with UPI or Net Banking
✔ KYC Completed with Broker or Bank
✔ Age above 18 years
✔ Sufficient funds in bank during application
✔ Indian Resident, NRI, or HUF

What is an IPO? (Simple Meaning)

An IPO (Initial Public Offering) is the process where a private company becomes public by selling its shares to retail and institutional investors for the first time.

Example: Companies like Zomato, LIC, and Nykaa issued IPOs to raise funds, expand business operations, and allow early investors to exit.

Why Do Companies Launch IPOs?

To raise large capital
To expand business operations
To pay off debts
To increase public visibility and trust
To allow early shareholders to sell their stake

Types of IPOs

1. Book Building IPO – Price band decided
2. Fixed Price IPO – Price is fixed beforehand

How Does an IPO Work? (Step-by-Step Process)

Company decides to go public
Submits DRHP to SEBI
SEBI reviews and approves
Price band announced
IPO opens for subscription
Investors apply via UPI/ASBA
Shares allotted
Listing happens on NSE/BSE

How to Apply for an IPO Online in India (2025 Updated Guide)

1. Through UPI (Zerodha, Groww, Upstox)

Login to your trading app
Go to IPO section
Select desired IPO
Enter lot size
Enter UPI ID
Approve mandate in UPI app

2. Through ASBA (Net Banking)

Login to your bank account
Click “IPO / ASBA” section
Select IPO
Choose number of lots
Submit

Documents Required

PAN Card
Aadhaar (for KYC)
Bank Account
Demat Account
UPI ID (for online application)

Factors to Check Before Investing in an IPO

Company fundamentals
Profitability & revenue growth
Market demand
Valuation & price band
Anchor investor participation

Advantages of Investing in IPO

Chance of high listing gains
Low entry price
Opportunity to invest early
Potential long-term wealth creation

Risks in IPO Investment

Listing loss
Overvaluation risk
Low allotment probability in hot IPOs
Business uncertainty

IPO Investment Tips for 2025

Always check the DRHP summary
Apply with multiple UPI IDs from family members
Track grey market premium (GMP) but don’t depend on it
Focus on profitable & growing companies

Top 20 FAQs on IPO (With Answers)

1. What is an IPO?
IPO means Initial Public Offering where a company sells shares to public.
2. How can I apply for IPO online?
You can apply via UPI on Zerodha, Groww, Upstox, or via ASBA Net Banking.
3. Is Demat account mandatory?
Yes, it is compulsory.
4. What is the minimum investment?
You must buy at least one lot (varies by IPO).
5. What is GMP?
Grey Market Premium indicates unofficial demand before listing.
6. Can beginners apply?
Yes, IPOs are beginner-friendly.
7. Is IPO safe?
IPO investments involve moderate risk.
8. How is allotment decided?
By lottery if oversubscribed.
9. What is listing gain?
Profit made if the stock opens higher than issue price.
10. Who regulates IPO?
SEBI (Securities and Exchange Board of India).
11. What is price band?
The range within which investors can bid.
12. Can NRIs apply?
Yes, through NRE/NRO accounts.
13. What is DRHP?
Draft Red Herring Prospectus filed with SEBI.
14. How many IPOs coming in 2025?
Expected: 40–60 major IPOs.
15. What is the best way for higher allotment?
Apply in retail category with multiple family accounts.
16. Can I sell IPO shares immediately?
Yes, on listing day.
17. What is anchor investor?
Large investor who invests before IPO opens for public.
18. What happens if IPO is not allotted?
Blocked amount is released automatically.
19. Is UPI fastest for applying?
Yes, UPI is the most preferred method.
20. Can I cancel my IPO application?
Yes, before the IPO window closes.