IPO & Demat Account: How to Apply, ASBA Process Explained

15 Jun 2026|

6 min read |

by ICICI Securities Team

IPO investing in India is now largely digital. You can apply through a broker, net banking ASBA, or a UPI mandate. Still, you should know the role of the demat account, ASBA, allotment and listing timeline. A demat account matters because allotted IPO shares are credited electronically, not issued as physical certificates.

For a first-time investor, the process may look confusing because several parties are involved, including the company, registrar, bank, broker, depository and exchange. In reality, your job is simple: enter correct details, keep funds ready, approve the payment instruction, and track the allotment status.

Once you understand these steps, IPO investing becomes much easier to approach. Take time to review the company's financial information and key risks before applying.

What Is an IPO?

First, let's understand what an IPO is and why it matters.

Meaning of IPO

An IPO, or Initial Public Offering, is the process through which a company offers its shares to the public for the first time. After the issue, the shares get listed on NSE or BSE, where investors can buy or sell them.

Why Companies Launch IPOs

A company may launch an IPO to raise capital, fund projects, repay debt, provide an exit for early investors, or improve market visibility.

Why Investors Apply for IPOs

Investors apply to become shareholders before exchange trading begins. Some seek long-term growth, while others expect listing gains. Allotment is not assured. It depends on demand, issue size, category and rules.

Why Do You Need a Demat Account to Apply for an IPO?

The link between an IPO and a demat account is direct. A demat account is required to receive allotted shares.

Role of a Demat Account in IPO Investing

A demat account stores securities electronically. When IPO shares are allotted, they are transferred to the investor’s demat account.

Demat Account vs Trading Account for IPOs

A demat account is needed to receive allotted shares. A trading account may not be required to apply, but it is required to sell shares after listing.

Bank Account and PAN Requirement

You also need a valid PAN and a bank account with enough balance. Under ASBA, the bank blocks the application amount and releases or debits it after allotment.

Can You Apply for an IPO Without a Demat Account?

No, you cannot apply for an IPO without a demat account. As per SEBI guidelines, shares allotted through an IPO are credited only in electronic form. Therefore, a valid demat account is mandatory for IPO application and allotment.

Why a Demat Account Is Mandatory

Applying for an IPO without a demat account is not possible for regular share allotment because IPO shares are credited electronically. The demat account ensures that the shares are recorded against the right investor after allotment.

Can You Apply Through a Bank Without a Demat Account?

Even with bank net banking ASBA, you need demat details. The form generally asks for name, PAN, demat number, bid quantity, bid price and bank details.

Can You Use Someone Else’s Demat Account?

For IPO applications, PAN, bank, UPI and demat details should match the applicable application norms. For UPI-based IPO applications, using another person’s UPI ID or bank account can make the application ineligible for allotment.

What Is ASBA in an IPO Application?

ASBA is the payment and fund-blocking method for Indian public issues.

ASBA Full Form and Meaning

ASBA stands for Application Supported by Blocked Amount. It lets you apply while the money stays blocked in your bank account until allotment. An ASBA Demat Account connection means your ASBA form carries the correct demat details for share credit.

How ASBA Is Different From Direct Payment

ASBA does not debit the full amount immediately. The bank marks a lien on the application amount. If shares are allotted, only the payable amount is debited. If you receive no allotment or only a partial allotment, the unused blocked amount is released.

Why ASBA Matters for IPO Investors

ASBA reduces refund delays because money stays in the investor’s account until allotment. It has been mandatory for public issues opening from 1 January 2016 onwards, making it the standard IPO route.

How Does the ASBA Process Work?

The ASBA journey is simple.

Step 1: Select the IPO

Choose the IPO from a broker platform, net banking portal, or approved intermediary. Read the dates, price band, lot size and category.

Step 2: Enter Investor and Bid Details

Enter your PAN, demat account number, DP ID, client ID, bid quantity, bid price, investor category and payment details. If using UPI, enter your own valid UPI ID linked to your bank account.

Step 3: Authorise Fund Blocking

For net banking ASBA, you authorise the blocking of funds. For UPI-based applications, approve the mandate in your UPI app using your PIN. The process covers bidding, blocking and post-allotment debit or release.

Step 4: Wait for Allotment

After closure, the registrar checks valid applications and finalises allotment. Oversubscribed IPOs may not allot shares to every applicant.

Step 5: Debit or Release of Blocked Amount

If shares are allotted, the required money is debited from your bank account. If shares are not allotted, the blocked amount is released. For partial allotment, only the amount for allotted shares is debited.

Step 6: Shares Are Credited to the Demat Account

Once allotment is completed, shares are credited to your demat account before listing.

How to Apply for an IPO With a Demat Account

To understand how to apply for an IPO with a demat account, use these routes.

Method 1: Apply Through a Broker or Trading Platform

Log in to your broker app. Open the IPO section, select the issue, choose the category, enter the lot size and bid price, submit your UPI ID if required, and approve the mandate.

Method 2: Apply Through Bank Net Banking ASBA

Log in to net banking and open the IPO or ASBA section. Select the issue, enter PAN and demat details, choose bid quantity and price, and authorise fund blocking.

Method 3: Apply Through Offline ASBA Form

You can also submit an ASBA form at a bank branch or authorised collection centre, depending on the bank and the issue process.

Step 1: Get the ASBA Form

Download the ASBA form from the stock exchange or issue-related platform, or collect it from a designated Self-Certified Syndicate Bank branch.

Step 2: Fill in the Required Details

Enter details such as applicant name, PAN, demat account details, bid quantity, bid price, bank account details and other required information.

Step 3: Submit the Form

Submit the completed and signed form at the designated bank branch where ASBA applications are accepted. By submitting the form, you authorise the bank to block the application amount in your account.

Step 4: Bank Processes the Application

The bank verifies the application, blocks the required amount and uploads the application details to the bidding platform.

Step 5: Amount Is Debited or Unblocked

If shares are allotted, the required amount is debited from your bank account. If shares are not allotted, the blocked amount is released as per the applicable process.

Details You Should Keep Ready

Keep your PAN, demat account number, DP ID, client ID, bank account, UPI ID, bid quantity, bid price and sufficient available balance ready before you start. Check your IPO application details carefully before submitting, as errors may result in rejection.

IPO Application Through UPI vs Net Banking ASBA

Parameter	UPI-Based IPO Application	Net Banking ASBA
Payment flow	UPI mandate approval	Bank blocks funds through ASBA
Common users	Retail individual investors	Retail and other eligible investors
Investor action	Approve mandate in UPI app	Authorise blocking in net banking
Fund movement	Blocked, debited on allotment	Blocked, debited on allotment
Key detail	Valid UPI ID	Bank and demat details

SEBI states that the UPI IPO application limit is ₹5 lakh per transaction and is available only for retail individual investors.

Conclusion

An IPO can be a useful way to participate in a company’s public market journey, but the process needs attention. A demat account is mandatory because allotted shares are credited electronically. ASBA keeps funds blocked rather than debiting them upfront, while UPI and net banking offer convenient options. Before applying, ensure your PAN, bank, and demat details are correct, read the RHP, and avoid applying only because an IPO is popular.

Frequently Asked Questions

Is a demat account required to apply for an IPO?

Yes. A demat account is required because allotted IPO shares are credited electronically.

Can I apply for an IPO without a trading account?

Yes, you may apply without a trading account, but you need one to sell shares after listing.

What is ASBA in IPO?

ASBA is an Application Supported by Blocked Amount, in which the application money remains blocked until allotment.

Is ASBA mandatory for IPO applications?

Yes. ASBA is the standard mandatory route for public issue applications in India.

What happens if I do not get IPO allotment?

The blocked amount is released to your bank account.

Can I apply for an IPO using UPI?

Yes, eligible retail investors can apply through UPI by approving the mandate.

Can I use someone else’s UPI ID for IPO application?

No, use your own UPI ID and bank account to avoid rejection.

What details are required to apply for an IPO through a demat account?

You need PAN, demat number, DP ID, client ID, bank details, bid quantity and bid price.

How does the IPO amount get blocked in my bank account?

Your bank marks a lien on the application amount under ASBA.

When is the IPO application amount debited from my account?

It is debited only if shares are allotted.

How long does the ASBA amount remain blocked?

It remains blocked until allotment is finalised and debit or release is completed.

Can I modify my IPO bid after submitting the application?

Yes, you can generally modify or withdraw your IPO bid before the issue closes, as permitted under SEBI rules. The exact steps may vary by broker, bank or platform, so check the available options where you submitted the application.