The Indian stock market is buzzing with Initial Public Offerings (IPOs) these days. Many retail investors are eager to invest in upcoming companies. However, the official IPO application window is usually open for only a few days during market hours.
This can be inconvenient for busy individuals. This is where the concept of “Pre-Apply IPO” comes in handy. It allows investors to place their bids before the IPO officially opens for subscription.
“Pre-Apply IPO” is a feature offered by many stockbrokers in India. It lets you submit your IPO application a few days in advance. The broker’s system stores your application and automatically submits it to the exchange as soon as the IPO opens. This saves time and helps you avoid the last-minute rush or technical glitches on the opening day.
This guide explains what Pre-Apply IPO means, how it works, its benefits, and the risks involved. It also covers how to use this feature on popular platforms like Zerodha, Upstox, Groww, and Angel One.
What is Pre-Apply IPO?
Pre-Apply IPO means submitting your IPO bid before the official subscription window opens. Normally, an IPO is open for 3 days, typically from 10:00 AM to 5:00 PM. During this time, investors can place their bids.
With the Pre-Apply feature, brokers allow you to place your order 2-3 days before the opening date. For example, if an IPO opens on a Wednesday, you might be able to pre-apply starting from Monday or Tuesday.
The broker collects these offline orders. When the IPO officially opens on the exchange (usually at 10 AM on the first day), the broker’s system pushes all these pre-collected orders to the exchange servers.
It is important to note that pre-applying does not mean you get an allotment before others. It just means your application is entered into the system early. The allotment process remains the same for everyone, based on a lottery system if the IPO is oversubscribed.
How Pre-Apply IPO Works
The process is simple and similar to applying during market hours. Here is a step-by-step breakdown:
- Select the IPO: You log in to your broker’s app or website. You will see a list of “Upcoming IPOs” or IPOs available for “Pre-Apply.”
- Place Bid: You enter the number of lots you want to buy and the price. Most experts recommend choosing the “Cut-off Price” to maximize chances of allotment.
- UPI Mandate: You enter your UPI ID linked to your bank account.
- Order Pending: After submitting, your order status will show as “Pending” or “Pre-Applied.” The amount is not blocked immediately.
- Execution: On the IPO opening day, the broker submits your order. You will receive a UPI mandate request on your payment app (like Google Pay or PhonePe).
- Block Funds: You must approve the mandate to block the funds in your bank account. Once approved, your application is successful.
Benefits of Pre-Applying
There are several advantages to using the Pre-Apply feature:
- Convenience: You can apply at your own time, even outside market hours or on weekends. This is great for people with busy jobs who might forget to apply during the 10 AM – 5 PM window.
- Avoid Glitches: On the first day of a popular IPO, heavy traffic can sometimes slow down broker apps or banking servers. Pre-applying ensures your order is already in the queue.
- Early Submission: Your application is submitted the moment the market opens. While this doesn’t guarantee allotment, it ensures you don’t miss out due to delays.
- Better Planning: You can plan your finances in advance since you know which IPOs you are targeting for the week.
Risks and Things to Keep in Mind
While convenient, there are a few things to watch out for:
- UPI Mandate Delay: Sometimes, even if you pre-apply, the UPI mandate request might come late on the opening day. You must keep checking your phone to approve it. If you miss the mandate, your application will be rejected.
- Market Sentiment Change: You might place a bid early, but negative news about the company could come out before the IPO opens. In such cases, you can cancel your pre-application before the issue opens.
- Funds Block: Your funds are blocked only after you approve the UPI mandate, not when you click “Pre-Apply.” Ensure you have enough balance in your bank account on the opening day.
How to Pre-Apply IPO on Zerodha (Kite)
Zerodha allows pre-applications for IPOs. Here is how to do it:
- Log in to the Kite app or website.
- Go to the Bids section and click on IPO.
- You will see a list of IPOs. Look for the “Pre-Apply” button next to upcoming IPOs.
- Click on it, enter the quantity and price (select Cut-off).
- Enter your UPI ID and submit.
- On the IPO opening day, accept the UPI mandate on your BHIM/UPI app to complete the process.
How to Pre-Apply IPO on Upstox
Upstox also offers a user-friendly pre-apply feature:
- Open the Upstox app and go to the Discover tab.
- Select Invest in IPOs.
- Find the IPO labeled “Pre-Apply”.
- Click Apply, enter the lot size, and choose the Cut-off price.
- Enter your UPI ID and confirm.
- Wait for the mandate notification on the issue opening day and approve it.
How to Pre-Apply IPO on Angel One
Angel One provides a similar facility:
- Log in to the Angel One app.
- Go to the IPO section on the home screen.
- Select the IPO from the “Upcoming” list that is open for pre-application.
- Click Apply Now. Enter lots and price.
- Enter your UPI ID and tap Invest.
- Approve the payment mandate when you receive it on the IPO launch day.
How to Pre-Apply IPO on Groww
Groww makes it easy to track and apply for IPOs early:
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- Open the Groww app.
- Scroll down to the IPO section.
- Click on an IPO marked “Pre-Apply”.
- Click Apply for IPO, enter bid details, and verify your UPI ID.
- Submit the bid. The status will show “Requested.”
- On the listing day, approve the UPI mandate to finalize the application.
Conclusion
Pre-applying for an IPO is a smart tool for modern investors. It removes the stress of timing the market and ensures your bid is placed smoothly. Whether you use Zerodha, Upstox, Angel One, or Groww, the process is largely the same and very user-friendly.
However, always remember that pre-applying is just a facility to place an order. The actual allotment depends on the demand and the lottery system. Always research the company’s fundamentals before hitting that “Apply” button, even if you are doing it early.
Related Disclaimer: This article is for educational purposes only. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. This is not financial advice.
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