Is it mandatory to have a demat account to apply in an IPO?

Yes it's mandatory to have a demat account to apply in an IPO. IPO Allocated shares are transfer to investors demat account. If you don't provide correct demat account information your IPO bidding application will not consider for share allotment.

Always double check that you provided correct DP ID and Client ID details in the bid/application forms before submitting the form.