Look, what I did recently is I properly analyzed all the good, big IPOs that have come out over the past two years. We see that lakhs of applications get rejected in those IPOs.
you should ensure that you are not making these seven mistakes. Understand carefully. You might make other mistakes besides these, but these are the seven mistakes where the highest number of applications are rejected.
1. Applying for Multiple Applications with a Single Pan Card
You can always file only one application per PAN card, which will be your normal application. You can file this under Retail, you can file it under Small HNI, or you can file it under Big HNI. Only one application will be filed per name.
You cannot do a thing where you have two Demat accounts in your own name—one on Zerodha and the second on Groww. You applied from Zerodha in Retail and from Groww in Small HNI. Two applications will be filed on a single PAN card, so it will be rejected upfront. This is a 100% rule that applies.
The Exception:
What is the exception to this? Suppose there is a Shareholder Quota in an IPO. Right now, we have the Jio IPO open in front of us, and there is a shareholder quota there. If you have even a single share of the parent company in your Demat account before the cut-off date, you can easily apply under the shareholder quota as well. By the way, the highest chances of getting an allotment are in the shareholder quota. Let me explain with an example (this is for educational purposes only)
To apply in the shareholder quota for Jio, it was necessary to have one share of Reliance in your Demat account on October 14th (the cut-off date). To have it on October 14th, you needed to purchase it on or before October 13th. Only if you purchased it then, and it was in your Demat on the October 14th cut-off date, would you be eligible.
Let’s clear some questions here:
“I have two Demat accounts—one in Zerodha, one in Groww. I already hold Reliance shares in my Zerodha Demat. Can I apply from Groww?” Yes, you can. It just has to be in your name. If a single share of Reliance is anywhere in any Demat account under my PAN card number, I will become eligible for the shareholder quota.
“I have limited funds. Should I apply for the shareholder quota or retail?” You should 100% apply for the shareholder quota, because here you get an allotment on a proportionate basis. You never get an allotment on a lottery system here. And in retail, what always happens? You only get to apply for one lot. In a good, heavily oversubscribed IPO, whether you apply for one lot or file an application worth ₹1,90,000… look, basic applications range from ₹15,000 to below ₹2,000 for retail. Within that, whether you do ₹15k or ₹1.9L, it is considered equal. But in the shareholder quota, it is not equal—the more you apply, the better it is.
Suppose you have ₹60,000 and you want to apply that amount, you can definitely apply in the shareholder quota. The maximum amount is below ₹2 million (the retail maximum limit), meaning you just need to keep the amount below that upper limit and you can easily apply in the shareholder quota.
So, that is the first mistake: One application per PAN card, except if there is a shareholder quota where you can apply for one normal application and one shareholder quota application without any issues.
2. PAN Card Mismatch
The PAN card listed in your bank account, the PAN card number given in your Demat, and the PAN card in your IPO application must all be the same. If there is any typing error anywhere, or if an incorrect PAN card number is entered anywhere, please get it updated. What happens with many people is they check the bank account and Demat, but while filing the application, they have to type it themselves in some places and they write the wrong PAN card number there. Even if just a single digit is wrong, your application will be upfront rejected.
3. Wrong Demat Details
You entered the wrong Demat details—maybe your Demat account number had some digit swapped up or down, and you thought, “What difference does it make? It’s in my name, with my PAN, it’s just one Demat.” The difference it makes is that you should check twice. If possible, copy-paste it directly so that your Demat isn’t wrong. If it’s wrong, it will be upfront rejected.
4. Forgetting to Approve the UPI Mandate or Insufficient Balance
The fourth major reason: “Bro, I applied for the IPO, I even used a UPI transaction, but I forgot to approve the mandate or I lowered the balance in my bank account.”
If you lowered the balance, the consequence is that even if you get an allotment, the transaction will fail due to insufficient funds, the allotment will be canceled, and you’ll face extra penalties and trouble. So, maintaining your balance is essential.
If you applied for an IPO through a UPI ID in your Demat, approving the mandate is compulsory. This gives your registrar permission to use the UPI mandate to deduct funds if you happen to get an allotment. You have to approve this.
Once, in our office, this happened to my editor. Listen to this case, it’s crazy: He got an allotment for an IPO. Due to some bank error (I don’t know how), the amount in his bank account was lower than the allotment value, yet the shares were successfully allotted to him and hadn’t been debited from his bank yet. He thought, “Hey, profit for me! What does it matter?” and he went ahead and sold the shares. Later, he had to pay separate penalties, return the shares, and it became a massive mess. Therefore, always maintain your balance.
5. Bid Price Issues
This is a different issue. Suppose an IPO has a price band of ₹1,000 to ₹1,050 (just as an example). I tried to act a bit smart and thought, “Retail-wise, I don’t think it will go up too much,” so I placed an IPO application at a price of ₹1,025 in Retail, Small HNI, or Big HNI.In the majority of cases, you must type the upper price. For Small HNI and Big HNI cases, the highest price must be punched in, and you can use the cut-off price option by default for retail applications. So don’t overthink this price thing. Sometimes people think, “No, no, I’ll place a bid right in the middle, what if I get an allotment?” You won’t.
Applications with bids lower than the highest cutoff price are the very first ones to be discarded if the IPO gets oversubscribed. If it doesn’t get oversubscribed, you might get it at ₹1,000, but if it gets oversubscribed, your application will be by default upfront rejected. Understand this carefully.
6. Joint Bank Accounts vs. Primary Holder Name Mismatch
What is this mistake? Your bank account or Demat account is a joint account, but you must place the IPO application under the name of the primary holder.Suppose Anant and Kajal Ladda (my wife and I) have a joint account, and I am the primary holder. If I apply for the IPO under Kajal Ladda’s name while using our joint bank account, the probability of this application getting rejected is very high.
7. Using Third-Party Bank Accounts
This leads right into my seventh point. Many people say, “Bro, I had Anant’s Demat account and Kajal’s Demat account—two Demat accounts—and I paid for both using Anant’s bank account. It doesn’t matter, my mandate got approved.”It might get approved. I mentioned this mistake last time too, and quite a few people argued with me, saying, “Hey, our mandate got approved!” Yes, it might get approved due to a glitch, because some banks are still approving it. But it also gets rejected, because if you look at the comments on that very video, there are thousands of comments saying, “Bro, ours got rejected. You are right, ours got rejected.”
You are right, ours got rejected.” I get tagged on Twitter every other day saying that I was right about pointing out that third-party bank accounts are not officially allowed. The majority of banks do not allow it; in some rare cases it still slips through, but why would you want to take that risk? You rarely ever get an allotment by making a mistake.
Your Demat account name must match your bank account name.
Your wife’s Demat account must use her bank account. Keep it very simple.
Also, many people think, “Bro, I applied for the application later, and due to some glitch, they accepted my application even after the closing time.” Sometimes an application might be accepted by a platform, but eventually, it will get rejected 100%. If you applied after the cut-off time, it is bound to go into rejection. Even if the platform shows you that your IPO application went through, you will never get an allotment. Suppose a special IPO is coming—like the Jio IPO right now—and the time is officially extended, then you can obviously apply within the extended time. But if it isn’t officially extended, don’t make this mistake.
These are seven mistakes that the majority of IPO applicants make, resulting in lakhs of applications getting rejected. Even now, I can bet that for this ongoing Jio IPO, a minimum of over 1 lakh applications will be rejected. I know it’s a trend, and why will it happen? Because of a high probability of committing one of these seven mistakes.