An IPO is an initial public offer. A company sells its shares to the public for the first time, and those shares are issued only in demat. You do not post a cheque. You bid, the bank blocks the money, and the account is debited only if shares are allotted.
A retail individual investor is someone whose bid is not more than ₹2,00,000. That is a value test, not an income test. A larger personal bid is non-institutional. Institutions sit in their own category. On the profitability route, retail is reserved at least 35% of the net public offer. A compulsory book-built issue is different: institutions need at least 75%, or the money is refunded, and retail is not more than 10%.
You need a PAN, a demat account in the same name, and your own bank account. The three PANs must match. One person sends one form. Up to 3 prices on that form are still one bid. A second form can be rejected.
The smallest lot is set so the application value falls between ₹10,000 and ₹15,000. You then bid in whole lots. Cut-off, which accepts whatever price is discovered inside the band, is for retail investors, and for employees or retail shareholders in a reservation. The bank blocks the amount at the cap. A lower issue price releases the difference.
A sample bid
This is not a live company. One lot of 100 shares at ₹100 is ₹10,000. 20 lots reach the retail cap and block ₹2,00,000. If the discovered price is ₹90, the shares cost ₹1,80,000 and ₹20,000 comes back. Nothing in that sum is a grey market premium.
A book-built issue stays open 3 to 7 working days. Listing, under the rule mandatory from 1 December 2023, is 3 working days after the close. The IPO guide walks through UPI and the bank route. Tax starts when you sell, which is the capital gains calculator. A monthly purchase instead of one bid is a SIP.
Mistakes
- Bidding above ₹2,00,000 at cut-off.
- Using someone else’s UPI ID.
- A demat account that is suspended for credit.
- Treating an off-exchange premium as the price in the band.
The offer document is the list of who may apply in that issue, including NRIs. NSE and BSE publish the book while it is open. Demand on those screens is not an allotment. If the issue finds fewer than 1,000 prospective allottees, the company cannot allot at all.
Questions
How much can a retail investor bid in an IPO?
Not more than ₹2,00,000. Above that the bid is non-institutional. A cut-off bid that crosses the cap can be rejected.
When do IPO shares list?
For issues that follow the current rule, trading starts 3 working days after the close. T is the closing date. The timetable has been mandatory for issues opening on or after 1 December 2023.
Is a grey market premium the issue price?
No. This site does not publish a grey market premium. The price that matters is the one in the offer document, or the price discovered inside the band.
Sources
Figures checked 30 Oct 2026.