How to Apply for IPO: Step-by-Step Guide, SME, IPO Analysis
One of the important investments in India has been an initial public offering (IPOs). In big mainboard IPOs as well as in high-growth SME IPOs, retail investors in India are seen to exercise an active participation in new listings to enjoy listing gains or long-term value.
Through the offerings of sites such as Zerodha, these days, an IPO application is completely digital and can be completed in a few minutes. However, applying for an IPO is easy – selecting the right IPO is not. Many investors apply blindly based on hype or social media tips and end up with losses post-listing.
At Trendy Traders Academy, under the tutelage of Abhishek Jha, emphasis is laid on the process-based IPO analysis, risk sensitivity and informed decision making – particularly significant in volatile Indian primary markets. Here we will discuss how to apply for IPO, how to apply IPO in zerodha, how to apply for SME IPO, how to apply IPO online, IPO analysis, what is IPO, etc.
What is IPO and How to apply IPO online?
The IPO (Initial Public Offering) is a process under which a company that is privately owned offers its shares to the market in a first time and becomes listed in the stock market.
In India, IPOs are broadly divided into:
- Mainboard IPOs (listed on NSE/BSE)
- SME IPOs (listed on NSE SME or BSE SME platforms)
Retail investors can apply for both categories using online platforms.
Prerequisites to Apply for an IPO in India
How to Apply for IPO? Before applying for any IPO, make sure you have:
- Active Demat account
- Trading account with broker (e.g., Zerodha)
- Bank account linked with UPI
- PAN linked with Demat & bank
- Sufficient funds in bank account
Without these, your IPO application will be rejected.
How to Apply for IPO Online in India?
The IPO application process in India follows a standard ASBA (Application Supported by Blocked Amount) mechanism.
Step-by-Step IPO Application Flow
- Choose the IPO you want to apply for
- Select investor category (Retail / HNI)
- Enter number of lots
- Select price (Cut-off recommended for retail)
- Approve UPI mandate
- Funds get blocked (not debited)
- Allotment happens after IPO closes
If shares are not allotted, funds are automatically unblocked.
How to Apply IPO in Zerodha?
How to Apply IPO in Zerodha? Zerodha is one of the most used platforms for IPO applications in India.
Steps to Apply IPO via Zerodha
- Login to Zerodha Console
- Go to Portfolio → IPO
- Select the active IPO
- Enter quantity (lots)
- Choose Cut-off price
- Submit application
- Approve UPI mandate from your UPI app
Note: Always approve the UPI mandate within the given time, or your IPO application will be invalid.
How to Apply for SME IPO in India?
How to Apply for SME IPO? SME IPOs are designed for small and medium enterprises and come with different rules and risks compared to mainboard IPOs.
Key Differences in SME IPOs
- Higher minimum investment
- Lot size is much bigger
- Lower liquidity after listing
- Mostly listed on SME platforms
SME IPO Application Process
The application steps are the same as mainboard IPOs, but:
- Investment amount is higher
- Retail participation is limited
- Selling flexibility is restricted
Important Warning: Risks in SME IPOs (Must Read)
SME IPOs can offer high listing gains, but they come with significant risks that many retail investors ignore.
Key SME IPO Risks
- Low liquidity after listing
- You cannot do partial selling
- Fewer buyers & sellers
- Higher price manipulation risk
- Exit may take days or weeks
Once allotted, you must sell the entire lot together – partial exit is not allowed in SME IPOs.
SME IPOs are suitable only for investors who:
- Understand liquidity risk
- Can hold for long periods
- Do not need quick exit
How to Apply for IPO Online Without a Broker App?
You can also apply for IPOs directly via your bank using ASBA.
Steps via Bank ASBA
- Login to your net banking
- Go to IPO / ASBA section
- Select IPO
- Enter bid details
- Submit application
However, broker platforms like Zerodha are simpler and faster for most investors.
IPO Analysis: How to Decide Whether to Apply or Not?
Applying blindly to every IPO is a common mistake. A proper IPO analysis framework is essential.
IPO Selection Checklist
Before applying to any IPO, check the following:
- GMP > 20%
- Good Subscription Numbers
- Strong Company Fundamentals
- Reasonable Valuation
- Clear Business Model
This checklist helps filter out low-quality IPOs.
How to Use GMP Properly?
GMP is the premium at which IPO shares trade in the grey market before listing.
- GMP above 20% → positive sentiment
- Rising GMP → strong demand
- Flat or falling GMP → caution
GMP is not official, but it reflects market expectations.
Subscription Data: What to Look For
IPO subscription shows demand from different investor categories.
Healthy Subscription Pattern
- Retail: 2x or more
- QIB: Strong institutional interest
- HNI: Balanced participation
Avoid IPOs where:
- Only retail is subscribed
- QIB interest is weak
Fundamental Analysis of IPOs
Even for listing gains, fundamentals matter.
Check:
- Revenue growth
- Profitability trend
- Debt levels
- Industry position
- Use of IPO proceeds
Loss-making companies are not always bad, but clarity of growth path is important.
Mainboard IPO vs SME IPO
Aspect | Mainboard IPO | SME IPO |
Minimum Investment | Low | High |
Liquidity | High | Low |
Partial Selling | Allowed | Not Allowed |
Risk Level | Moderate | High |
Retail Friendly | Yes | Limited |
Common Mistakes Investors Make in IPOs
- Applying only based on social media hype
- Ignoring SME liquidity risk
- Not checking GMP & subscription
- Blocking too much capital
- Expecting guaranteed listing gains
IPO investing is probability-based, not guaranteed.
Long-Term vs Listing Gain IPO Strategy
Listing Gain Strategy
- Focus on GMP
- Strong subscription
- Exit on listing day
Long-Term Strategy
- Strong fundamentals
- Industry growth
- Management quality
Both strategies work – but mixing them creates confusion.
Conclusion
Applying for an IPO in India has become simple, but smart IPO investing still requires discipline and analysis. Whether it is by using Zerodha or ASBA, knowing your business, screening GMP, and reviewing subscription data can go a long way as far as success is concerned. SME IPOs can be tempting, however, its liquidity risk turns it into unsuitable investments of casual investors.
At Trendy Traders Academy, the teaching of IPO is grounded in the process, the awareness of risks and making decisions considering the facts, rather than hype. Investors can invest in the emerging primary markets in India in a structured manner without making emotional decisions by following a systematic checklist of IPO.
FAQ'S
How to apply for IPO in India online?
You can apply online using broker platforms like Zerodha or through your bank using ASBA.
How to apply IPO in Zerodha?
Login to Zerodha Console, select IPO, enter lot details, and approve the UPI mandate.
How to apply for SME IPO in India?
SME IPOs can be applied via brokers like mainboard IPOs, but require higher investment and come with liquidity risks.
How to apply IPO online in India?
You can apply for an IPO online using your Demat + trading account through your broker’s website/app or via UPI using the ASBA facility.
What is GMP in IPO analysis?
GMP (Grey Market Premium) shows unofficial market demand for an IPO before listing.
Is IPO investment risk-free?
No, IPOs carry market risk, listing risk, and liquidity risk, especially in SME IPOs.
