Can I apply an IPO application in the name of Minor or HUF?

Short Answer

Yes, you can apply for an IPO application under a minor or HUF's name, provided they have different PAN card numbers. Minors can open a Demat account with their parent’s PAN Card and bank account.

Detailed Answer

As per the SEBI guidelines, a person willing to apply for an IPO can only apply once for a particular IPO. Any more than one application per IPO will lead to the rejection of all the extra applications applied. Its determined by the PAN number as to how many applications the traders or investor might have applied. However, when it comes to a minor or HUF willing to apply for an IPO, things change slightly.

An IPO application under the name of a minor or HUF can be applied provided they have their PAN card details, minor demat account, and savings bank account details. For bank account details, traders or investors can give their account details as banks allow up to 5 IPO applications to use the same bank account details. But do keep in mind, you cannot use your PAN card details. Only the minor’s or HUF’s PAN card details would be viable in this situation.

What are IPOs?

When a company sells its shares to the common public for the first time, the process is known as an ‘Initial Public Offering’ or IPO. After an IPO, a private company is converted to a public limited company as the shares are sold to retail and institutional investors.

When applying for an IPO, you are among the first investors to purchase the shares of a private company from the primary market. And once the listing takes place, you can buy/sell the shares on the stock exchanges with the help of a stock broker and Demat account. IPOs have been in the limelight for the past couple of years, as a plethora of companies went public from 2020 to 2021. Additionally, there are many IPOs lined up in 2022. Hence let’s look at some of the requirements for applying for an IPO.

Requirements for applying in an IPO

When you are applying for an IPO, you are bidding for the shares of a company. Therefore, the primary requirement for applying for an IPO is a Demat and trading account.

1. Demat & Trading Account

A Demat account is an account that maintains your shares safely and allows you to buy and sell them freely. Without an active Demat account, you cannot purchase or sell shares of any company.

2. Bank Account

Next, you need to have a bank account to make the payment for the shares. A bank account is mandatory because the whole IPO process is online. Therefore, you will need to make the payment for the IPO application through UPI or ASBA (Application Supported by Blocked Amount). While applying for an IPO, the funds are blocked in your bank account for a certain time frame. And only after successful allotment the amount is deducted from your account.

3. Pan Card

You will also require a valid PAN number through which your application will be mapped to the registrar of the IPO. PAN number is compulsory when applying for an IPO. Also, only one IPO application can be placed from a pan number. Or all the applications will get rejected if you apply for multiple lots from numerous Demat accounts.

Can I apply for an IPO in the name of a minor?

A common question among investors is, “Can I apply for an IPO from a minor’s account.”

Minors can open a Demat account with their parent’s PAN Card and bank account. Thereby, if a minor has a Demat account, you can apply for an IPO through that account. However, you should remember, you can use only 1 PAN number for one IPO application. Hence, if you have placed an application from a minor’s demat account, you cannot place another application using the same PAN Card.

Can I apply for an IPO from a HUF account?

Another common question when investing in an IPO is, “Can I apply for an IPO from a HUF account”

HUF or ‘Hindu Undivided Family’ account is treated as a separate account. Therefore, if you have a Demat account in the name of a HUF, you are eligible to apply for an IPO through it. HUF accounts are a great way to apply for IPOs as you can increase your chances of receiving an allotment when applying through multiple accounts.

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Categories: IPO Basics
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Related FAQs

Can I apply in an IPO through multiple applications on same name?

No, a person cannot apply for a single IPO more than ones. There are strict rules and regulations followed in this matter. However, his/her family members can apply for the IPO under their name provided they have a demat account and PAN number.

Can I apply more than one IPO application in my name from different saving bank accounts in same bank or different banks?

Only one PAN card can be used for one application. No matter how many different savings account details you might utilize, if there is the same PAN number in more than two applications, then all of them would be revoked.

Can a minor apply in IPO?

Have you ever wondered id a minor can apply for an IPO? Yes, a minor can apply for an IPO given that he/she has a PAN card and a Demat account.

Can I apply IPO in name of family members & friends from my saving bank account?

Yes, you can apply for an IPO application for your family and friends through your savings bank account details. However, keep in mind that only five applications can be filled with the same bank account details.

How to apply IPO in Zerodha? Buy IPO Online

If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.

Where do I get an IPO application form?

An IPO application form can be procured from a syndicate office member of the IPO or a stockbroker. You can download and print the IPO forms.

How many IPO applications can I submit through online net banking from one bank account?

There are about 5 IPO applications that can submit through online net banking from one bank account. However, the number can change immensely from one bank to another.

Can one apply an IPO from sweep in/out saving bank account?

There is no possibility of a user having a sweep in/out account linked to their IPO application. It would simply get rejected.

Is it mandatory to have a PAN Number to apply in an IPO?

Yes, it is mandatory to have a PAN number to apply for an IPO since July 2006 as per Securities and exchange board of India (SEBI).

Can I apply for more than 1 Lot in IPO from different Demat accounts?

Yes!, one can apply 1 Lot from different Demat accounts but they have to make sure that the other Demat account should not be mapped under their name or PAN Card. If one applies through 2 or more Demat accounts that are mapped under their name then all of the applications will get rejected.