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What an IPO is, how to apply, lot size, the allotment process — a complete guide for the Indian stock market.
Published by The Retail Trader · AUG 08, 2026 · Features
What an IPO is, how to apply, lot size, the allotment process — a complete guide for the Indian stock market.
The full form of IPO is Initial Public Offering. When a company offers its shares to the public on a stock exchange for the first time — that is called an IPO.
Simple definition: > IPO = A company is selling its shares to the public for the first time. You can become a part-owner of the company.
Real Example:
• Zomato IPO (2021): ₹72-76 price band, ₹9,375 crore raised
• Paytm IPO (2021): ₹2,080-2,150 price band, ₹18,300 crore raised
• Tata Technologies IPO (2023): ₹475-500 price band, huge oversubscription
The company needs money for expansion → decides to launch an IPO
The company files a Draft Red Herring Prospectus (DRHP) with SEBI (the market regulator). SEBI reviews it and gives approval.
The company announces a price band:
• Example: ₹300-350 per share
• You can bid anywhere between ₹300 and ₹350
The IPO stays open for 3-5 days. You can apply during this period.
In an IPO you have to apply for at least one "lot":
• Example: Lot size = 40 shares
• Price ₹350 → Minimum investment: 40 × ₹350 = ₹14,000
During the IPO period the subscription status comes in:
• 1x = Exactly demand = supply
• 3x = 3x demand > supply (oversubscribed)
• 10x = Very high demand → allotment is difficult
If the IPO is oversubscribed, allotment is done through a lottery system:
• 1 lot is not guaranteed
• In the retail category you usually get 1 lot (in small IPOs)
• In big IPOs, partial allotment happens
The shares get listed on the stock exchange:
• Listing gain: If it lists above the IPO price → instant profit
• Listing loss: If it lists below → instant loss
Via Zerodha (Kite):
• Open the Kite app
• Console → IPO section
• Active IPOs will be shown
• Apply → enter your UPI ID
• Select the lot size
• Submit
• Approve the UPI mandate (in your bank app)
Via Groww:
• Open the Groww app
• IPO tab
• Select an active IPO
• Apply → UPI ID
• Select lot size + price
• Submit + approve the UPI mandate
Via Bank (ASBA):
• Log in to net banking
• IPO/ASBA section
• Select the IPO
• Fill in the application
• The amount will be blocked (ASBA)
The DRHP contains the company's complete information:
• Business model
• Financial statements
• Risk factors
• Use of proceeds
• Management team
GMP tells you how the market is reacting to the IPO:
• GMP positive = Listing premium expected
• GMP negative = Listing discount expected
• GMP zero = Neutral
Oversubscription helps you understand the allotment probability:
• Retail 1x = You will easily get it
• Retail 10x = Allotment is difficult
• QIB high = Institutional interest is strong
Only one application is allowed per PAN. Multiple applications = rejection.
Tip 5: Decision on Listing Day:
• Got a listing gain? → Book profit (partial or full)
• Listing loss? → Check the company fundamentals → Hold or exit
Keep these four points in mind:
• 2023 — Avg Listing Gain: +28%, Notable Winners: Tata Technologies, IREDA
• 2024 — Avg Listing Gain: +35%, Notable Winners: Bajaj Housing, Hyundai India
• 2025 — Avg Listing Gain: +22%, Notable Winners: Mixed
• 2026 YTD — Avg Listing Gain: +18%, Notable Winners: Data available on TRT calendar
Disclaimer: IPO returns vary widely. Some IPOs give 100%+, some fall 30% on listing day.
Getting an allotment is difficult in oversubscribed IPOs. Applying does not mean you will get an allotment.
It can list below the IPO price. The Paytm IPO gave a 27% loss on listing day.
Promoters' shares are under a lock-in of 6-12 months. Selling pressure can arrive when the lock-up ends.
Some companies launch their IPO at an overvaluation. The stock falls in the long term.
To see upcoming IPOs on TRT's calendar:
• Go to /calendar
• Select the IPO section
• Upcoming IPOs with dates, price bands and lot sizes will be shown
Keep these points in mind:
• 📌 IPO QUICK REFERENCE
• PROCESS:
• 1️⃣ Company files DRHP with SEBI
• 2️⃣ Price band announced
• 3️⃣ IPO opens (3-5 days)
• 4️⃣ Apply via broker (Zerodha/Groww) or bank (ASBA)
• 5️⃣ Check the subscription status
• 6️⃣ Allotment (lottery if oversubscribed)
• 7️⃣ Listing day (trading starts on the stock exchange)
• HOW TO APPLY:
• ✅ Zerodha → Console → IPO → Apply
• ✅ Groww → IPO tab → Apply
• ✅ Bank → Net banking → ASBA
• ✅ Approve the UPI mandate
• TIPS:
• 📊 Read the DRHP (business, financials, risks)
• 📊 Check the GMP (grey market premium)
• 📊 Watch the subscription status
• 📊 1 PAN = 1 application only
• 📊 Book profit on listing day (if gained)
• RISKS:
• ❌ No guaranteed allotment
• ❌ Listing loss possible
• ❌ Overvaluation risk
• ❌ Lock-up period selling pressure
Keep these five points in mind:
• IPO Calendar — Upcoming IPOs
• What Is the Share Market?
• What Is the Stock Market?
• How to Open a Demat Account?
• Nifty 50 Companies List 2026
The Retail Trader — educational market analysis. Not investment advice.
This article is for educational purposes only — it contains no buy or sell recommendation, no claim of guaranteed returns, and no advisory. Rules, rates and mechanics change from time to time at the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.