A demat account holds shares in electronic form. Demat is short for dematerialised. You do not keep a paper certificate in a file. The depository’s record is the holding, and your depository participant — the bank or broker that opened the account — is who you deal with.
An IPO uses that account from the start. Section 29 of the Companies Act, 2013 requires the shares to be issued in demat. The application asks for the DP ID and the client ID. Those numbers must match the depository, or the form is liable to be rejected. The account also has to be active. SEBI’s circular of 29 July 2010, which the general information document still cites, treats an account suspended for credit as inactive. Demographic details are not passed on for those accounts, and the bid can fail.
The PAN on the demat account must be the PAN on the application and the PAN on the bank account that blocks the money. The registrar matches them. A mismatch stays invalid even if the name looks right. Update the address and the bank details before you bid. The registrar uses what the depository already has.
After the shares arrive
Allotted shares are credited to this same account before trading starts. On the current timetable that is 3 working days after the issue closes. There is no separate nomination for those shares. The nomination on the demat account covers them.
A sale after listing is an ordinary market trade. The contract note and the demat statement are the record of what you sold and what it cost you. The capital gains calculator uses those rupees. It does not log into the demat account. The IPO guide is the application itself: lots, the retail cap of ₹2,00,000, and the block at the cap.
You can hold other things in demat too, such as a gold ETF or an existing bond. A mutual fund bought from the fund house need not sit in your own demat account. An IPO allotment does. One person, one PAN, and one active account is the combination the form is built for. A second application in another demat account, with the same PAN, can be treated as a multiple bid.
Open the account, seed the bank and the PAN, and check that it is not frozen for credits, before the issue opens. Doing it on the closing afternoon is how a correct bid still gets rejected.
Questions
Do I need a demat account to apply for an IPO?
Yes. Shares in a public issue are issued only in demat, under section 29 of the Companies Act, 2013. There is no paper certificate to collect from the company.
What is a DP ID and a client ID?
They are the two numbers that identify your demat account. The form is rejected if they do not match the depository’s record. An account suspended for credit can be rejected as well.
Does the nomination on my demat account cover IPO shares?
Yes. Once the shares are credited, the nomination already registered on the demat account is the one that applies. The IPO form does not create a second nomination.
Sources
Figures checked 30 Oct 2026.