For a typical Indian book-built IPO, the path is: the company files a draft red herring prospectus (DRHP), publishes the red herring prospectus (RHP) and price band, accepts investor bids through ASBA or UPI, completes allotment, credits shares to successful applicants’ demat accounts, and lists the shares on a recognized exchange. Under the current three-working-day framework described in SEBI-filed offer documents, listing follows issue closure on a compressed timetable, but the exact dates always come from that IPO’s RHP and exchange notices.
What an Indian IPO is—and what “book-built” means
An initial public offering (IPO) is a company’s first public sale of shares to investors. In India, the process described here is the usual book-built public issue. Instead of fixing one selling price in advance, the issuer announces a price band. Investors submit bids for a number of shares at a price within that band, and the demand collected during bidding helps determine the final issue price.
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The price band, lot size, opening and closing dates, investor categories, and other conditions are issue-specific. Treat the current offer documents as the controlling source for those details. This article does not assume that every public issue uses identical rules; fixed-price issues and special categories can follow different mechanics.
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An IPO filing is a disclosure and regulatory process, not an endorsement that the shares are suitable or that the business will perform well after listing. The issuer’s documents contain the information needed to make an independent decision, including its business, financial statements, risks, proposed use of proceeds, and the structure of the offer.
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Step 1: The issuer prepares and files the DRHP
What the DRHP contains
The company works with its book running lead managers to prepare the draft red herring prospectus. For a book-built issue, the DRHP sets out the proposed offer and the issuer’s disclosures but does not contain the final price or final number of securities offered. Those terms are established later in the process.
Read the DRHP as a detailed risk and disclosure document. It normally covers the company’s business model, industry, material contracts, financial information, litigation and regulatory matters, promoters and major shareholders, risk factors, objects of the issue, and how the company expects to use the proceeds. The risk-factor section is not a formality: it identifies circumstances that could affect operations, cash flow, ownership, or the value of the shares.
Where the documents are filed
SEBI’s public-issues filing index distinguishes among document types. Draft offer documents are filed with SEBI; the red herring prospectus and final offer document are filed with the Registrar of Companies (RoC). This distinction explains why a document you find at one stage may not contain the final commercial terms.
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A DRHP filing does not mean SEBI is recommending the IPO, guaranteeing the issuer’s forecasts, or certifying a future market price. It means the proposed issue has entered the disclosure and review process. Use the filing to investigate the company; do not treat the filing itself as a buy signal.
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Step 2: Review the offer disclosures before bidding
After the draft is filed, the issuer and its advisers address the applicable review and disclosure requirements and prepare the documents used for the live offer. There is no single universal review duration or identical set of comments for every issuer, so do not rely on a generic calendar. The offer can proceed only on the timetable and terms published for that particular issue.
A practical reading order
- Start with the risk factors. Note customer concentration, dependence on a few suppliers, debt, contingent liabilities, regulatory exposure, related-party transactions, and any qualifications or adverse observations in the financial information.
- Check the objects of the issue. Separate fresh-issue proceeds, which go to the company, from an offer for sale, in which existing shareholders sell their shares. The use of proceeds and the selling shareholders affect what the IPO funds can accomplish.
- Examine the financial section. Look at revenue, profit or loss, cash flows, borrowings, working-capital needs, and the periods covered. Compare the stated business risks with the financial numbers rather than reading the headline growth rate alone.
- Confirm the offer structure. The document states the proposed issue size, categories, reservation details, and other conditions. Do not infer the lot size or investor allocation from another IPO.
Keep the DRHP available, but check the later RHP for the terms that apply when applications open. Material disclosures and final terms can be updated during the progression from draft to live offer.
Step 3: The RHP sets the bidding terms
Price band and book building
Before the issue opens, the issuer publishes the RHP and announces the price band. In a book-built issue, you bid within that band. The bids form the order book, and demand at different prices informs price discovery. The final issue price is determined after the bidding process under the rules stated in the offer documents.
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Details you must verify for the specific IPO
- Bid opening and closing dates and times.
- Lower and upper limits of the price band.
- Minimum bid lot and the number of shares in each additional lot.
- Permitted investor categories and category-specific allocation rules.
- Whether the issue is a fresh issue, an offer for sale, or both.
- Application, allotment, refund or unblocking, demat-credit, and listing dates.
- Details of the registrar, stock exchanges, lead managers, and accepted application channels.
The final prospectus follows pricing and records the final terms. A price band is not a promise that the stock will trade at, or above, the upper end once listed.
Step 4: Submit an application during the bidding window
Retail investors generally apply using the ASBA mechanism, including the UPI-based application route supported for eligible applications. Your bid specifies the quantity of shares and, subject to the issue’s rules, the bid price. A bid at the cut-off option may allow the retail applicant to accept the final discovered price; read the live application form and RHP for how that option is presented.
ASBA: your money is blocked, not immediately paid away
ASBA stands for Application Supported by Blocked Amount. As SEBI’s investor guidance puts it: In ASBA, money to the extent of price of the shares for which the investor has applied, is blocked, but it remains in their account till allotment.
The bank places a lien or block for the application amount in your account. The funds remain there and continue to earn interest. If you receive an allotment, the amount needed for those shares is debited. If you receive fewer shares than requested, only the applicable amount is debited and the rest is released; if you receive no shares, the blocked amount is unblocked. ASBA therefore is not the same as sending the full bid value to the issuer on the day you apply.
ASBA application checklist
- Use your own eligible bank account and the application channel accepted for the issue.
- Enter the correct PAN, demat-account details, bid quantity, price or cut-off instruction, and bank information.
- Confirm that the account has enough available balance for the maximum application amount, even though it is only blocked initially.
- Submit the application before the issue’s closing time and save the application or acknowledgement number.
- Monitor the block, allotment status, debit, unblocking, and demat credit through your bank, registrar, and demat statements.
UPI authorization: the block is approved in your UPI app
With the UPI route, you provide a UPI ID in the IPO application. The sponsor bank sends a request to authorize the block. You must approve that request in the UPI application within the permitted time. The funds remain blocked until allotment; the amount for allotted shares is then debited and excess funds are unblocked.
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SEBI’s investor guidance states a ₹5 lakh per-transaction limit for retail individual investors using the UPI IPO application route. The operational list of eligible banks and applications can change, so check the live SEBI information and the current issue instructions before applying.
Do not use a third party’s UPI ID or a third party’s bank account for your application. SEBI’s guidance warns that applications using third-party UPI IDs or third-party bank accounts can be rejected or fail to receive an allocation. The name, PAN, demat account, bank account, and UPI authorization should be consistent with the applicant details required by the issue.
ASBA versus UPI: which route fits your application?
| Point | ASBA through a bank channel | UPI-based IPO application |
|---|---|---|
| How the block is created | Your bank blocks the application amount in the account specified in the application. | Your bank blocks the amount after you approve the sponsor-bank mandate in the UPI app. |
| When money leaves the account | Only the amount required for allotted shares is debited after allocation. | Only the amount required for allotted shares is debited after allocation. |
| Unused amount | Released after the allotment process if it is not required. | Unblocked after the allotment process if it is not required. |
| Interest while blocked | The blocked money remains in the account and earns interest under the ASBA explanation. | The funds remain blocked in the linked bank account until debit or release, subject to the applicable process. |
| Important eligibility point | Use an eligible bank and the channels listed for the issue. | Use an eligible bank/application and your own UPI ID; SEBI’s cited guidance states a ₹5 lakh per-transaction retail limit. |
| What the evidence does not establish | The cited SEBI material does not establish that one route is universally faster or more reliable. Choose the route you can complete correctly and monitor. | |
Step 5: Bidding closes and the issue determines allotment
When the bidding window closes, the issue processes the bids, determines the final price under the book-building rules, and completes allocation according to the published category and allotment framework. A high number of bids does not guarantee that every applicant receives shares. Demand, category rules, bid validity, and the number of shares available affect the outcome.
What happens to your application money
- Successful or partly successful application: the amount corresponding to the shares allotted is debited from the blocked funds.
- Part allotment: the balance not needed for the allotted quantity is released.
- No allotment: the blocked amount is unblocked.
Check the registrar’s allotment announcement and your bank or UPI status rather than assuming that a pending mandate means an allotment. Keep the application number until the block is released or the shares appear in your demat account.
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Step 6: Shares are credited to demat accounts
Successful applicants receive shares in dematerialized form. There is no paper share certificate for the normal exchange-listed process. The credit appears in the demat account linked to the valid application after the allotment process is completed.
If the shares are not visible when the published credit date has passed, compare the name, PAN, demat details, and application status; then contact the issue registrar or your broker/depository participant using the official contact details in the offer documents. Do not submit a second IPO application merely because the credit is delayed.
Step 7: Listing on the stock exchange
The current three-working-day framework
SEBI investor guidance describes listing on a recognized stock exchange within three days after issue closure. A SEBI-filed offer document records the phased implementation of a three-working-day period from issue closure to listing: voluntary for issues opening on or after September 1, 2023, and mandatory for issues opening on or after December 1, 2023.
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Listing is an event, not a return
Once trading begins, the market price is set by buying and selling in the secondary market. The offer price should not be treated as an indicator of the post-listing market price, as an issuer’s offer document warns. A stock can open above, at, or below the issue price, and the listing schedule says nothing about future gains or losses.
A date-by-date checklist for an IPO applicant
- Before the issue opens: read the latest RHP and the available DRHP disclosures; verify the price band, lot size, dates, category, registrar, and accepted application routes.
- During bidding: submit only through an approved channel, use matching applicant and bank/demat details, and retain the application number.
- After submitting: for UPI, approve the mandate in the app; for ASBA, confirm that the bank block is visible. A submitted form without a valid block is not a completed application.
- After closure: wait for the published allotment process. Do not assume that oversubscription or a mandate request means you will receive shares.
- On the scheduled credit date: check the demat account and the debit or unblocking entry in the bank account.
- On listing: check the exchange’s notice and the trading symbol. Decide separately whether to hold or sell; listing itself is not investment advice.
Common mistakes and how to prevent them
- Using the DRHP as if it contained final terms: the DRHP omits the final price and number of securities in a book-built issue. Recheck the RHP.
- Confusing a block with a payment: ASBA funds remain in your account until allotment. Watch for the final debit or release.
- Missing the UPI mandate: entering a UPI ID is not enough; the sponsor-bank request must be authorized in time.
- Using someone else’s payment identity: third-party UPI IDs or bank accounts can invalidate the application or prevent allocation.
- Applying from an insufficiently funded account: the maximum bid amount must be available when the block is placed.
- Assuming a universal timetable: use the issue’s own dates and distinguish working days from calendar days.
- Treating regulatory filing as a recommendation: assess the disclosed risks, financials, valuation information, and use of proceeds independently.
What to verify in official documents
Before submitting an application, use the issuer’s current offer documents and exchange disclosures to confirm the financial information, material risks, issue structure, price band, lot size, dates, allocation information, and listing date. Rules and operational details—including UPI limits, eligible banks and applications, category rules, bidding cut-offs, and the listing timetable—can change. Current SEBI circulars and investor guidance take precedence over an older consolidated regulation or a description from a previous IPO.
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