An IPO, or Initial Public Offering, is the first time a company sells its shares to the public, and applying for one in India is now mostly a few taps on your phone. The whole process runs on UPI or your bank's ASBA facility, which blocks the money in your account rather than debiting it upfront, so you only pay if you actually receive shares. Understanding the steps, and the odds, is what separates a confident applicant from a confused one.
How to Apply
The application itself is simple. You open the IPO section of your broker's app or your bank's net banking, select the live IPO, choose the number of lots, and bid at the cut-off price, which means you accept whatever final price the company sets within its band. You then approve a UPI mandate or confirm the ASBA block.
Once approved, the application amount is blocked in your bank account. You cannot use that money until the IPO closes and allotment happens, but it stays yours, earning interest, and is released in full if you are not allotted shares. Applications are only accepted during the subscription window, which is usually three days.
The Investor Categories
Not everyone competes in the same pool. IPOs are divided into categories, each with a fixed slice of the issue, so your competition is only within your own group.
| Category | Who it is | Application size |
|---|---|---|
| Retail (RII) | Individual investors | Up to Rs 2 lakh |
| Non-institutional (NII/HNI) | Larger individuals | Above Rs 2 lakh |
| Qualified institutional (QIB) | Mutual funds, banks | Large institutions |
Most small investors apply in the retail category, where shares are handed out by lottery when demand is high. Because the reserved portions are fixed, a stampede in the institutional category does not directly reduce your retail odds, and vice versa.
How Allotment Works
This is the part that surprises first-timers. When an IPO is oversubscribed, meaning more applications than shares, retail allotment is decided by a computerised lottery, so applying is no guarantee of getting any shares. The Kratikal Tech cybersecurity IPO in 2026 was subscribed about 17 times, which meant most retail applicants walked away with nothing.
Applying for more lots does not improve your chances in the retail category, since the lottery works per application, not per lot. For heavily oversubscribed issues, one lot is often the sensible bid. After allotment, shares land in your demat account and any blocked money for unallotted shares is released, usually within a day or two.
Reading the Grey Market Premium
Around every hyped IPO you will hear about the GMP, or grey market premium. It is the unofficial price at which the shares trade before listing, and while a high GMP signals optimism, it is rumour-driven, unregulated, and frequently wrong. The Knack Packaging and Advit Jewels issues of 2026 both listed with GMPs in the double digits, but the grey market is a mood ring, not a promise.
After You Apply
Once the issue closes, the basis of allotment is finalised, typically within a few days, and you can check your status on the registrar's website or your broker app. Allotted shares are credited to your demat account, and the stock lists on the exchange, usually within about a week of the issue closing.
On listing day the price can open above or below the issue price, depending on demand and the overall market mood, not just the grey market signal. A stock that was heavily subscribed can still list flat if sentiment turns, which is why the broader market backdrop, tracked on our Indian stock market today page, matters. For a live example of how a mainboard issue is structured, see our Knack Packaging IPO breakdown, and for an SME issue, the Kratikal Tech IPO.
The mechanics are easy, but the mindset is what counts: an IPO application is a bid in a lottery you might lose, on a company you should study first, with a grey market number you should mostly ignore.