How to Apply for an IPO Using ASBA and UPI
Published 2026-10-16 · Aadarna Stock Broking Pvt. Ltd.
Key takeaways
- With ASBA, your application money stays in your own bank account and is only blocked, not debited.
- Applying through a broker app uses a UPI mandate that you must approve in your UPI app.
- If shares are allotted, the blocked amount is debited; if not, it is unblocked.
- Allotment is never certain, especially when an issue is oversubscribed.
An Initial Public Offering (IPO) is when a company sells its shares to the public for the first time. Applying has become simple: you can apply from your broker's app in a few minutes, and your money does not leave your bank account unless you actually get shares.
This guide explains how that works and the mistakes that most often cause applications to fail. It does not discuss whether any particular IPO is worth applying for.
What is ASBA?
ASBA stands for Application Supported by Blocked Amount. Instead of paying the company upfront, you authorise your bank to block the application amount in your own account.
While it is blocked you cannot spend it, but it stays in your account. If you are allotted shares, the amount needed is debited. If you are not, the block is removed and the money is available to you again.
How the UPI mandate works
When you apply through a broker's app, the payment authorisation usually happens through UPI. After you submit the application, a mandate request is sent to your UPI app.
- Choose the IPO in your broker's app, enter the quantity in lots and your bid price.
- Enter your UPI ID. It must be linked to a bank account in your own name.
- Submit the application.
- Open your UPI app and approve the mandate request before the deadline shown for the issue.
- Check that the application status shows the mandate as accepted.
Until you approve the mandate, the application is not complete. Many applications fail simply because the mandate was not approved in time.
After the issue closes: allotment
After the issue closes, the registrar decides allotment according to the rules in the offer document. When an issue receives more applications than shares available, allotment for small investors is usually done by a lottery-style process, so you may get shares or you may not.
You can check your allotment status on the registrar's website or the exchange websites using your PAN or application number. If shares are allotted, they are credited to your demat account before listing day.
Investor categories in an IPO
An IPO sets aside portions of the issue for different types of investors, such as retail individual investors, non-institutional investors and qualified institutional buyers. Each category has its own rules on how much you can apply for and how allotment is done.
Most individuals apply in the retail category. The offer document and the application screen in your broker's app show the limits that apply to each category for that particular issue, so check them before you bid.
Some issues also have a separate portion for employees or shareholders of a parent company. You can apply in those only if you are eligible, and the offer document explains who qualifies.
Common reasons applications are rejected
- The UPI mandate was not approved before the cut-off.
- The UPI ID or bank account is in someone else's name.
- Multiple applications under the same PAN in the same category.
- Not enough balance in the bank account when the mandate was approved.
- Incorrect demat or PAN details.
Before you apply
- Read the company's offer document, especially the risk factors. It is published on the SEBI and exchange websites.
- Remember that the listing price can be above or below the issue price. An IPO is not a sure way to make money.
- Apply only with money you can keep blocked until allotment and can afford to invest.
Frequently asked questions
Is the money debited when I apply?
No. With ASBA it is only blocked in your bank account. It is debited only for the shares actually allotted to you.
How do I know if my money has been unblocked?
Your bank will show the block removed, and you will usually receive a message. If the money is still blocked well after the allotment date, contact your bank first and then the registrar of the issue.
Can I apply for an IPO without a demat account?
No. Allotted shares are credited to a demat account, so you need one in your own name, linked to the same PAN as the application.