How to apply

Applying is mechanical, and two of the mechanics are genuinely useful to understand rather than just follow.

Your money is blocked, not paid

Applications go through ASBA — Application Supported by Blocked Amount. SEBI's description is exact: the full bid amount is blocked in the bank account of the bidder.

Blocked means it stays in your account. You cannot spend it, and it has not gone anywhere. If you get no allotment, it is unblocked. SEBI puts the consequence plainly:

there is no transfer of money takes place from the applicant's account to escrow account instead the specified amount gets blocked in the applicant account and in case of non-allotment of shares the same amount gets unblocked in the account.

This is why "IPO refund" is the wrong word for what happens, and it is a real improvement on the era when money left your account and came back weeks later. It also means you keep whatever interest the account pays throughout.

ASBA is mandatory in public issues for retail, non-institutional and institutional investors alike.

UPI, and the limit on it

Retail applications are usually made with a UPI mandate routed through a sponsor bank. You enter a UPI ID on the application, approve a mandate request in your UPI app, and the amount is blocked.

SEBI's material gives the limit: the UPI facility in ASBA is available for retail individual investors, and for shareholders bidding in a shareholders reservation portion, up to ₹5,00,000. Above that, the application goes through a bank or a broker rather than a UPI mandate.

The price band, and its arithmetic

An issue does not open with a price. It opens with a band, and there are rules about its shape.

SEBI's investor material states the cap: "The price band cap cannot exceed 20% of the floor price." The FAQ gives both ends — the spread between floor and cap "shall not be not less than 5% and not more than 20%".

So a band of ₹90 to ₹100 is legitimate: the cap is 11% above the floor. A band of ₹90 to ₹120 is not.

The band must be announced at least two working days before the issue opens for an IPO. If it is revised, the bidding period extends by three days, subject to a total bidding period not exceeding ten working days.

How long it stays open

A book-built public issue stays open 3 to 7 working days, extendable by 3 days if the price band is revised. A fixed price issue runs 3 to 10 working days.

Which is a very short window in which to read three hundred pages, and the argument of chapter 2 for reading the draft instead.

The cut-off box, which only retail can tick

This is the most useful mechanic in the chapter.

When bidding in a band, you normally name a price. Retail individual investors — those applying for securities worth up to ₹2,00,000 — may instead tick cut-off, which means: whatever price is discovered inside the band, I will take it.

SEBI explains why that matters:

Unlike price bids (where a specific price is indicated) which can be invalid, if price indicated by applicant is lower than the price discovered, the cut-off bids always remain valid for the purpose of allotment.

Read that twice. If you bid ₹94 in a ₹90–₹100 band and the price is discovered at ₹96, your bid is invalid — not scaled, not partially filled. It is out, and you were never in the running for an allotment.

A cut-off bid cannot suffer that. It is blocked at the cap, because the cap is the most it could cost, and if the price comes in lower the difference is unblocked.

There is a real decision underneath the box. Ticking cut-off says you want the shares at any price in the band. Naming a price below the cap says you want them only at that price and would rather miss out. Both are defensible; most people tick cut-off without noticing they made a choice.

Revising and cancelling

You can revise the quantity or the price, and you can cancel, but only until the issue closes. After that the bid is fixed.

Two rules SEBI states flatly

One application per PAN. One person, identified by PAN, is permitted to make only one application in an IPO. Multiple applications from the same PAN are rejected — which is also why the "apply from several family accounts" tactic works only where those are genuinely different people with their own PANs, demat accounts and funds.

Your own money. Funds routed through a third party are not a valid payment.

If your bank gets it wrong

One failure has a remedy most people do not know exists. Where a retail investor gets no allotment because of a failure on the part of the self certified syndicate bank, SEBI provides compensation for the opportunity loss — payable if the listing price is above the issue price, and claimable within three months of the listing date.

The point

Money is blocked in your own account, not paid. UPI works up to ₹5,00,000. The band spreads 5 to 20 per cent and is announced two working days ahead. Only retail may bid at cut-off, and a named price below the discovered price is thrown away entirely.