Demat account for IPO: how to open one and what to compare

Updated 26 October 2026 · 4 min read

You need a demat account to apply for an IPO in India, because allotted shares are credited to it in electronic form. Most people open a demat and trading account together with a SEBI-registered broker, online, in 10 to 20 minutes using Aadhaar-based e-KYC. Activation usually takes from a few hours to a couple of working days, so open it well before the IPO you have in mind closes.

This guide explains what a demat account is, how online opening works, what documents you need, what to compare between brokers, and the mistakes that cause trouble at IPO time. It is neutral: it does not recommend any particular broker.

What a demat account is

A demat (dematerialised) account holds shares and other securities electronically, much like a bank account holds money. The account is kept with one of the two depositories, NSDL or CDSL, through a depository participant (DP), which is usually your broker. A trading account is the separate account you use to place buy and sell orders on the exchange. For IPOs you apply through the broker's app (or net-banking ASBA, quoting your demat details), and allotted shares land in the demat account.

• Demat account: holds the shares. Identified by DP ID and client ID (or a 16-digit BO ID for CDSL).
• Trading account: used to buy and sell; linked to the demat account.
• Bank account: in your name, linked for UPI or ASBA, where IPO money is blocked.

How to open one online

1. Choose a SEBI-registered broker and start the sign-up on its website or app with your mobile number and email.
2. Enter your PAN and date of birth; the details are checked against the Income Tax records.
3. Complete Aadhaar e-KYC with an OTP sent to the mobile number linked to your Aadhaar.
4. Add bank details and upload proof (a cancelled cheque or bank statement), plus a photo and signature.
5. Complete in-person verification, usually a short video or selfie step in the app.
6. Add a nominee or formally opt out, as required.
7. e-Sign the application with an Aadhaar OTP. The broker then opens the account and sends your client ID.

What to compare between brokers

There is no single "best" broker for IPOs; most mainstream brokers support UPI IPO applications. Look for what matters to you: if you mainly apply for IPOs and sell rarely, the annual charge counts more than brokerage. The Demat account page on IPOScanner lists current broker offers if you want a starting point for comparison.

Timing before an IPO

Say an IPO you are interested in opens on Monday and closes on Wednesday. If you start opening an account on Tuesday night, a delay in KYC verification could mean the account is not active in time. Starting a week ahead removes that risk. After the account is active, check that the IPO section of the app lets you place a bid and that your UPI app receives mandates.

• Open the account at least a few working days before the IPO closes.
• Check that the account shows as active and KYC is complete.
• Do a trial: open the IPO section and confirm your UPI ID is accepted.

Common mistakes

• Using a bank account or UPI ID in someone else's name; the bid will be rejected.
• Name on PAN, bank and demat not matching (initials, spellings).
• Opening several demat accounts hoping for more allotment; all share one PAN and count as one applicant.
• Forgetting the annual charge on an account you no longer use; close unused accounts properly.
• Sharing your login, OTP or UPI PIN with anyone offering to "apply for you".

After you have the account

You can apply for IPOs from the broker app with UPI, or from net banking with ASBA. When you apply, tap "＋ I applied" on the IPO page here to track allotment and listing under My IPOs, and set alerts on Telegram, WhatsApp or in your browser for new issues.