The securities market in India is extremely diverse and dynamic. Irrespective of where you stand on the spectrum of risk tolerance, you shall find no dearth of asset classes to invest in across a wide array of sectors. 

With the application of demat accounts and trading accounts, the process of investing in the market has become seamless. It has also become easier to apply for shares in Initial Public Offerings (IPOs) through demat accounts. 

In this article, we shall discuss whether you need a demat account to invest in an IPO. We shall also delve into the various modes of applying for an IPO. 

What is an Initial Public Offering 

Let us firstly discuss what an IPO is. An Initial Public Offering or IPO is the first public issue of shares by a company. Launching an IPO is a critical step for a company to transition from private shareholding to public shareholding. 

Various categories of investors can apply for an IPO, including retail investors. In order to apply for an IPO of any company, you must have a demat account. Should you get allotment of shares post the closure of the issue, said shares shall get credited to your demat account. 

Is a demat account required to apply for an IPO 

Yes, a demat account is required to apply for an IPO. Not only is your demat account number required for the allotment of shares in an IPO, the account can be used to make the application for the issue. Therefore, before applying for an IPO, you must complete demat account opening and have a functional demat account.

Various modes of applying for an IPO 

There are various modes through which you can apply for an Initial Public Offering. The most convenient method is applying online through your demat account platform or your bank’s Internet Banking platform. 

You can also apply for an IPO offline through a designated bank branch or an authorised stock broker. Let us discuss these modes of IPO application. 

• Through Your Dp Or Stock Broker’s Demat Account/ Trading Platform

 In order to apply for an IPO through your demat account, you must log in to the account, select the option marked IPOs, and search for the relevant issue. 

Then you must select the IPO you wish to apply to, enter the required number of lots of shares, application price, and other necessary details. 

Once you submit the application, the applicable application amount shall be blocked in the linked bank account through ASBA (Application Supported by Blocked Amount). 

• Through Your Bank’s Internet Banking Platform

You can also apply for an IPO through Internet Banking. To do so, log in to your bank’s Internet Banking application or website, select the menu marked IPOs, and locate the IPO you wish to apply for. 

Then enter the application price, number of lots of shares, and submit the application. The application amount shall be blocked in the savings bank account. 

• Offline Application Through A Bank Branch

To apply for an IPO through the offline mode, you can visit a bank branch that offers ASBA facility. Then you must obtain an IPO application form, fill the form, and submit the duly filled form along with the required documents, including a copy of your PAN card. You can also find such a form from the website of BSE or NSE. 

• Offline Application Through An Authorised Stock Broker

If you wish to apply for an IPO through a stock broker, you can obtain the IPO application form from an authorised broker, fill the form, and submit it to them. The application amount has to be paid via a bank cheque. 

The Bottomline 

Irrespective of the method you select for your IPO application, you shall require a functional demat account to submit such an application. Before applying for an IPO, you must complete the demat account opening process.