Indian Capital Markets on WebNotes

Basis of allotment in an Indian IPO

Mon, 11 May 2026 00:00:00 +0000

The basis of allotment is the SEBI-prescribed methodology by which the registrar to an issue of an Initial Public Offering decides which applicants receive how many shares, given that demand from each investor category routinely exceeds the shares reserved for that category. The basis of allotment is the procedural heart of the Indian IPO process. It converts an unprioritised pool of bids into a deterministic allotment file, governed by the SEBI (ICDR) Regulations, 2018 and a body of operational SEBI circulars dating to the introduction of book building in the early 1990s. The completed basis of allotment is published on the registrar website, the lead manager websites, and the stock exchange websites; it forms the legal record on which the depositories credit shares to allottees on T+2 and the listing approval is granted for T+3 trading.

Initial Public Offering (IPO) in India

Mon, 11 May 2026 00:00:00 +0000

An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the public for the first time on a recognised stock exchange. In India, the IPO process is governed by the Securities and Exchange Board of India (SEBI) through the SEBI (ICDR) Regulations, 2018, with the actual subscription mechanics built around the Application Supported by Blocked Amount (ASBA) framework and the Unified Payments Interface (UPI) for retail applicants. As of mid-2026, the timeline from issue closure to listing has been compressed to three working days (T+3) under a SEBI circular mandatory from 1 December 2023, and the per-transaction cap on a UPI mandate for capital-market use has been raised to ₹5,00,000 under an NPCI notification of September 2025.

UPI ASBA (Unified Payments Interface — Application Supported by Blocked Amount)

Mon, 11 May 2026 00:00:00 +0000

UPI ASBA is the retail-investor payment mechanism for Initial Public Offering applications in India, in which the applicant authorises a one-time UPI mandate that blocks (rather than debits) the application amount in the applicant’s own bank account until allotment is finalised. UPI ASBA is a specific operational form of the broader ASBA framework introduced by SEBI in 2008, layered on top of the Unified Payments Interface (UPI) rails operated by the National Payments Corporation of India (NPCI). It was made compulsory for retail individual investors applying through a stockbroker by SEBI’s Phase II circular of 28 June 2019 and is, as of mid-2026, the only payment route available to retail bidders going through an intermediary such as Zerodha, Groww or Upstox.