What is an IPO?
An IPO (Initial Public Offering) is the process where a private company sells its shares to the public for the first time.
Once listed, the company’s shares start trading on the NSE or BSE stock exchange.
Why Companies Launch an IPO?
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To raise funds for business expansion
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To repay old loans
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To strengthen brand value
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To allow early investors to book profit
Types of IPO Investors
IPO is divided into major categories:
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Retail Investors (RII) – For normal investors
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High Net-Worth Individuals (HNI)
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Qualified Institutional Buyers (QIB)
Retail investors can apply using UPI + Demat Account.
Benefits of Investing in an IPO
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Chance of listing gains
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Invest early in a growing company
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Transparent share allotment system
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Long-term growth potential
Risks in IPO
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Listing might happen below issue price
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Not all IPOs perform well
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High subscription reduces allotment chances
Documents Needed to Apply for IPO
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Demat Account
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Trading Account
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PAN Card
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Bank Account with UPI
How to Apply for an IPO? (Step-by-Step Guide)
Step 1: Open a Demat & Trading Account
Use platforms like Zerodha, Groww, Upstox, Angel One, etc.
Step 2: Check Upcoming IPOs
You can see IPO details on your broker app.
Step 3: Select IPO & Enter Bid Details
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Choose lot size
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Enter bid price (usually select cut-off price)
Step 4: Enter UPI ID for Payment
UPI is used to block the required amount.
Step 5: Approve Mandate on UPI App
Open Google Pay, PhonePe, or Paytm → Approve Mandate.
Step 6: Wait for Allotment
You will get:
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Allotted shares → Amount deducted
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Not allotted → Amount unblocked automatically
Step 7: Listing Day Trading
Shares get listed on NSE/BSE.
You may:
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Sell at listing
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Hold for long-term
Is IPO Good for Beginners?
Yes, IPOs are beginner-friendly if you research the company before investing.
Check:
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Company financials
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Industry growth
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Promoters’ background
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GMP (Grey Market Premium) for indication
Conclusion
IPO is a great way to start investing in the stock market.
With a Demat + UPI, you can easily apply within minutes.
Always research before investing to reduce risk and increase returns.