Quick Answer: How to Buy an IPO in 5 Steps

In short: You buy an IPO by opening a demat and trading account, then applying through your broker's app during the 3-5 day subscription window using a UPI mandate that blocks (not debits) your bid amount. If shares are allotted, they land in your demat account after allotment is finalised; if not, the blocked money is simply released.

The five steps, in order:

1. Have a demat account, a trading account, and a PAN card ready before the issue opens.
2. Open your broker's app, go to the IPO section, and select the live issue.
3. Enter your bid quantity as a multiple of the lot size, at a price within the band (or at cut-off), and enter your UPI ID.
4. Approve the UPI mandate request that arrives on your UPI app, usually within an hour or two.
5. Wait. Your funds sit blocked under ASBA until allotment is decided, then either debited for allotted shares or released back to you.

What You Need Before You Apply

You cannot apply for an IPO without three things in place first: a PAN card, a demat account, and money in a bank account linked to UPI. Angel One's own eligibility rules for IPO applications are direct about this — you must be a legally competent adult with a PAN card issued by the Income Tax department and a valid demat account, and you also need a trading account if you intend to sell the shares once they list (Angel One).

If you don't have these accounts yet, that's the first job, not the application itself. Most retail brokers open a demat-cum-trading account online in a day or two. If you're choosing where to open one, a comparison like Top 10 Trading Apps India covers what each broker charges and which ones support IPO applications directly inside the app.

Step-by-Step: Applying via UPI/ASBA

Once your accounts are ready and an IPO you like is open for subscription, the actual application takes a few minutes.

1. Open the IPO tab in your broker's app and pick the live issue.
2. Enter your bid. Quantity has to be a multiple of the lot size — Groww's own help page is explicit that you must "ensure the quantity selected is a multiple of the lot size" (Groww). If it's a book-built issue, you bid within the price band, or you can simply select "cut-off price" and let the final price apply to you.
3. Enter your UPI ID and submit the application.
4. Approve the mandate. Groww's guide says a mandate request arrives on your UPI app "within an hour or two" of submitting your bid — you just approve the payment, and the amount gets blocked, not paid, in your bank account (Groww).
5. Do nothing else. Your bid amount is now blocked under the ASBA (Application Supported by Blocked Amount) facility introduced by SEBI, and stays that way until allotment (Angel One).

Only the amount tied to shares you're actually allotted gets debited. HDFC Bank's own walkthrough gives a clean example: apply for shares worth ₹1,00,000 and get allotted ₹40,000 worth, and only ₹40,000 is debited from your account — the rest is never touched (HDFC Bank). One thing worth knowing before you bid twice hoping to improve your odds: Angel One warns that applying for the same IPO more than once with the same PAN and demat account gets the application rejected outright, not doubled (Angel One).

The Full Timeline: From Bid to Demat Credit

Every broker's page tells you its own piece of the clock. Put together, here's the whole sequence:

• Day 1 to Day 3-5: The issue is open for bidding. Motilal Oswal frames this plainly — bidding happens "during the 3-5 days window when the IPO is Open," using funds blocked via UPI (Motilal Oswal).
• Within an hour or two of your bid: The UPI mandate request lands on your app for approval (Groww).
• 10-12 days after the issue: The basis of allotment is finalised. Angel One states this window directly, with demat credit following "within a couple of days after that" (Angel One).
• Within six working days: If you get the full allotment, HDFC Bank's guide says you'll receive a Confirmatory Allotment Note (CAN) confirming it, and Angel One notes demat credit follows within a couple of days of the basis of allotment being finalised (HDFC Bank; Angel One). That's the moment the shares actually appear in your demat account — the whole clock, from the day bidding opened, runs roughly 3-5 days of bidding plus 10-12 days to allotment plus a couple of days for the demat credit itself.
• From listing day onward: Once the stock starts trading, it behaves like any other listed share, including India's regular T+1 trade settlement for anyone buying or selling it on the exchange (Bharatstox).

That HDFC partial-allotment example from earlier fits directly into this clock: the unallotted balance on a ₹1,00,000 bid isn't "refunded" as a separate step you have to chase — it's simply never debited once the basis of allotment is finalised in that 10-12 day window, and the block on it lifts around the same time the CAN goes out.

Apply for the IPO vs Buy After Listing: Which Should You Do?

Both routes get you the same shares. The difference is cost certainty, allotment certainty, and timing.

If you want certainty over price discipline, applying during the IPO makes sense — you know the exact price band going in. If you'd rather see how the stock actually trades before committing money, waiting for listing day removes the allotment lottery but exposes you to whatever price the market sets.

What Happens on Listing Day

If you didn't apply, or didn't get allotted shares, listing day is your entry point. Motilal Oswal lays out how the session is structured on the day a new stock starts trading: a pre-open session from 9:00 AM to 9:45 AM, where big investors place orders that help decide the opening price; a price discovery window from 9:45 AM to 10:00 AM, where the exchange matches orders and fixes the starting price; and then regular trading from 10:00 AM to 3:30 PM, when you can buy and sell the stock like any other listed share (Motilal Oswal).

Practically, that means you can't place a normal buy order at 9:15 AM and expect it to fill — the price hasn't been discovered yet. Once regular trading opens at 10:00 AM, you place the order through your broker just like you would for any listed stock. One exception worth knowing: Motilal Oswal notes that SME IPO shares must still be bought in lots even after listing, unlike mainboard shares — you can't buy just one share of an SME stock (Motilal Oswal).

There's a catch worth knowing before you assume "buy after listing" is always simple. A newly listed stock can open sharply higher than its issue price and hit its upper price band for the day, meaning there are buyers at that price but no sellers willing to sell there. When that happens, your buy order sits unfilled even though the market is technically open — you're not blocked from trying, but you may not actually get the trade done that day.

Tax on IPO Shares When You Sell

Whether you got the shares through the IPO or bought them later on the exchange, the tax rule is the same once you decide to sell. Motilal Oswal's guide is clear on this: hold the shares for more than 12 months and you pay 12.5% tax on profits above ₹1.25 lakh (Motilal Oswal). The holding period is counted from the date of allotment if you got the shares in the IPO, or from your purchase date if you bought after listing.

If you sell within 12 months, a different, short-term set of rules applies instead — our guide on holding periods and capital gains on listed shares covers that distinction in more detail.