In an IPO, a company offers shares to the public for the first time. People often assume that applying means getting shares. It does not.
Price band and lots
A company usually announces a price band (like ₹95 to ₹100 per share) and a lot size (like 150 shares). You must apply for at least one lot, and in whole lots after that. A retail investor's application is capped at ₹2 lakh in total value.
Applying with UPI and ASBA
You apply through your broker's app or your bank. The money is not paid out. It is blocked in your bank account under a system called ASBA (Applications Supported by Blocked Amount), through a UPI mandate that you approve. You earn bank interest on it until the shares are allotted or the block is removed.
Oversubscription
Suppose Sunrise Biscuits offers 1 crore shares but investors apply for 5 crore. The IPO is 5 times subscribed. There are not enough shares for everyone. For retail applicants, when the issue is oversubscribed beyond what each can be given, allotment is done by a computerised lottery among valid applications. Applying for more lots from one account does not raise your chances. Multiple applications from the same PAN are rejected.
Timeline
IPO timelines are set by SEBI. Roughly, after the issue closes on day T, the allotment is finalised by about T+1, refunds and unblocking of money by about T+2, and shares are listed and start trading by about T+3. You can check your status on the registrar's website (the company that handles the process) and in your demat account.
Listing day
On listing, the share starts trading on the exchange. Its price can open above or below the issue price. The unofficial grey market premium (GMP) is not official data and not a forecast. Read what IPO and GMP mean.
Where to find facts
Dates, price bands and lot sizes are on our IPO tracker, taken from the NSE's public lists. The full details are in the company's offer document (the prospectus). This page does not say whether any IPO is worth applying for.