April 08, 2026
8 mins read
IPO bidding is how people apply for shares in a public issue. Applications are accepted only for a limited time. After the issue closes, shares are allotted based on demand and category. If shares are not allotted, the blocked amount is released. The process follows set timelines.
An IPO is when a company sells its shares to the public for the first time. People can apply for these shares only during a short window. That application process is called IPO bidding.
This is not like buying shares in the market. You cannot buy anytime. First, you apply. Then you wait. Shares are allotted later, depending on demand.
The process follows fixed rules. Applicants choose a price or select the cut-off option. Everything must be done within the issue period.
Knowing these steps helps reduce confusion. It also helps avoid mistakes that can happen when applications are rushed or filled incorrectly
IPO bidding means placing an application when a company launches its public issue. The bid is submitted while the issue is open and within the allowed price range.
Applicants can choose a specific price or select the cut-off option. The choice depends on preference and eligibility under the investor category.
All bids are collected first. They are not processed immediately. Once the issue closes, allotment is done together.
If shares are allotted, they are credited later. If not, the blocked funds are released back to the bank account.
An initial public offering has gained wide popularity in the country because it offers investors an opportunity to enter a promising company in the initial years. Let’s take a look at some of the benefits of investing participating in IPOs:
One of the key rules of creating an impressive investment portfolio is to ensure diversification. Investing in an IPO provides an opportunity to diversify the portfolio by investing in different companies to smaller shares.
One of the biggest advantages of participating in an IPO is that once the company goes public you have the right to sell the shares in the market and on profit.
If you are a retail investor then participating in an IPO must be on your investment list. This is because SEBI mandates that in case of an oversubscription of IPOs, the company has to ensure at least one lot of shares to retail investors.
Online bidding needs a demat account and a bank account that allows funds to be blocked for applications during the issue period.
After selecting the IPO, the applicant chooses the number of shares and the price option before submitting the bid.
The application amount stays blocked in the bank account until allotment is completed or the block is removed.
Changes to bids are usually allowed while the issue is still open, within the given timelines.
Offline bidding starts by collecting a physical application form from a bank branch or authorised intermediary.
The form must be filled with personal details, demat information, bid price, and number of shares applied for.
Payment is approved through the bank or cheque so funds remain blocked until allotment is finalised.
Allotment status must be checked separately, as updates may not be sent automatically for offline applications.
The ASBA or Application Supported by Blocked Amount Is an integral part of the IPO application process that was developed by the SEBI to streamline the process of IPO bidding. Remember that to apply for an IPO, SEBI has made it mandatory to fill out the ASBA form.
Here’s everything you need to know about the ASBA form:
To fill out the ASBA form you can either download it from the official website of the Bombay stock exchange or National Stock Exchange or get it by visiting the nearest branch of your bank account. You can also get the ASBA application while participating in an online IPO application process from your broking platform.
The ASBA streamlines the payment process for IPOs. Remember that till the time an amount is blocked from the bank account, you do not lose any interest on the blocked account. The money is debited only if the IPO is allotted in your name and in any other case the amount blocked is released by the bank.
Remember that IPO bidding is an important step in deciding whether or not the IPO will be allotted under your name and whether or not it will bring profits. Here’s a list of tips and strategies to help you in IPO bidding:
When a company decides to go public it is obvious that the company will make sure to create an illusion of profits. Therefore it is important for you to dig deep and research well about the company either by collecting information online, analysing the company‘s position with its competitors, reading press releases and researching about the industry’s health overall.
Remember that while applying for an IPO it is important that you trust a company that has strong underwriters. Although a strong underwriter doesn’t always guarantee profits, it is highly unlikely for a reputed underwriter to associate its name with a deteriorating company.
A prospectus is your insight into the company’s financial health, future business planning, the way the company is planning to use proceeds from the IPO subscriptions etc. Therefore you must carefully analyse the prospectors and see whether or not it aligns with your investment goals.
Participating in IPO bidding and getting a successful allotment can bring impressive profits to your investment portfolio. However, as a beginner, you must ensure to avoid common mistakes that can either lower your chances of getting the IPO allotment or get trapped into false market trends.
Take a look at these common mistakes that you must avoid during IPO bidding:
Remember that every investor in the market has a different investment goal and risk appetite therefore you must avoid the herd mentality. Instead of going blindly for companies that have created hype in the market you must carefully analyse the company’s financial position and consider applying for an IPO only when it aligns with your investment goals.
Another common mistake investors make is not doing adequate research. One of the most common mistakes investors make while applying for an IPO is getting trapped in false market alarms and trends.
When you fill out the application form for IPO bidding, you must cross-check all the details to avoid making mistakes that can dismiss your application.
Lastly, chasing brands and listing gains are other common mistakes that investors often make while applying for an IPO. A simple rule of investment is that not all large numbers come with promised returns and therefore the right way forward is adequate market research and investing only when you have a risk appetite.
Once you have placed an IPO bid, it is submitted to the concerned stock exchange. Remember that till the timeshares are allotted, the amount you have bid for the IPO is blocked from your account through an ASBA mechanism.
After all the bids for the concerned IPO are completed, the company runs the data and finalises the IPO price depending on the bids. If the bid you made is equal to or closer to the final IPO price, the shares are allotted under your name, and you will be able to see it in your demat account. When shares are allotted in your account the money blocked from your account will be debited.
In any case, when your IPO application is rejected, the blocked amount from your account will be automatically released.
Additional Read: IPO Eligibility Criteria & Requirements
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You need to have a valid demat account, a registered bank account, a PAN card and address proof.
Yes, you can modify or cancel your IPO bid after submission by logging into your broking platform and making the request. However, remember that once the shares have been allotted you cannot cancel or modify your bid.
The IPO allotment process is the distribution of shares to all the investors who have applied for it. Now, depending on the number of subscriptions the company either goes for a pro-rata system or a lottery.
The ASBA is a form that is filled by an applicant for an IPO. This form authorises the bank to block the amount from the applicant’s bank account till the time IPOs are allotted.
No, there aren’t any charges associated with applying for an IPO.
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