3rd Party IPO Application: Multiple Applications from one Bank Account

Most banks allow only one online IPO application from a bank account. But some banks such as SBI and Axis Bank allow up to 5 IPO applications from one bank account. This process is called a third-party IPO application facility.

Note:

• Only one IPO application per bank account is allowed when using UPI as a payment gateway. Brokers like Zerodha, Upstox, and Angel offer only 1 IPO application per bank account.
• Only a few banks like SBI, Bank of Baroda, RBL, Axis, and IndusInd Bank offer five applications from 1 bank account.
• In 3rd party IPO application, all the applicants must have PAN cards and Demat accounts.
• Online IPO applications for Minor and HUF accounts are possible only through banks offering 3rd party IPO applications.

No, only one IPO application is allowed per person across all investor categories in an IPO.

If you apply for multiple IPO applications in the same name, all applications get rejected. You cannot submit one bid in the Retail category and another in HNI, employee, or shareholders category.

You can apply for multiple IPO applications using 3rd party IPO application facility. Though you can apply for up to 5 IPO applications, you cannot apply for more than one IPO application in one name.

Banks like SBI, Axis, Bank of Baroda, IndusInd, and RBL offer 3rd Party IPO applications. You can apply in up to 5 IPO applications using one bank account with these banks. If you have a bank account in any of these banks, you could apply multiple IPO applications in the name of a family member or friend, as long as they have their Demat account and PAN number.

The 3rd Party IPO application is the only online mode for applying IPOs for Minor and HUF accounts.

You cannot apply for multiple IPO applications if you do not have a bank account with either of the above banks offering the 3rd Party IPO application feature.

Yes, you can apply from two different accounts with one ASBA bank account using 3rd party IPO application facility provided:

1. You have an account with the bank providing 3rd party IPO application facility. (SBI, Axis, Bank of Baroda, RBL, and IndusInd)
2. The applicant has the Demat account and PAN of its own as one person can apply only 1 IPO application in an IPO across all investor categories.

Some banks (like SBI, Axis, BoB, IndusInd, and RBL) offer 3rd party IPO applications where you can apply in an IPO with different bank accounts. Though the bank account can be different, each applicant should have the Demat account and PAN card. One person can apply only once for an IPO application across all investor categories.

You can use these bank accounts to apply for IPO shares in Minor, HUF, friends, or family member's Demat accounts.

Many banks (like HDFC, ICICI, Kotak, Yes Bank, and PNB) offer only one IPO application per bank account, where Demat and bank account should belong to the same person.

As per the regulation, the funds for IPO applications should come from the bank account linked to the demat account used for the IPO application.

The stock exchanges along with the registrar and banks are responsible to validate this information.

Process of validating 3rd Party Bank Account in IPO Application

Following is the process stock exchanges, registrars, and banks follow to find the 3rd Party bank accounts used in the IPO application:

1. Once the public issue closes, the exchange sends the IPO application file to all the banks to take the confirmation that the bank account linked in the demat account is the same used in the IPO application.
2. Banks get only a day to revert. There are lakhs of records to validate.
3. Some banks revert with the confirmation of whether the account numbers match or not.
4. Exchange put a flag (Valid or 3rd Party) and sends it to the registrar.
5. The registrar rejects all IPO applications which are flagged as 3rd party.
6. In some cases, the 3rd party flag comes as empty from the exchange. It happens in the case where a few banks do not respond in the given time. These are the records that are neither rejected nor accepted by the bank.
7. The registrar sends the file with pending records to the banks again and waits for one more day. Registrar gets a few confirmations. Some banks still do not respond in time.
8. If confirmation is not received from banks, the benefit of the doubt is given to the IPO applicant. This is because banks are supposed to own this. No one else can confirm if the information is correct or not.
9. Wherever such confirmations do not come, by default those applications cannot be rejected, hence they are considered for allotment.

It's a wrong thing that these people are getting allotments but there is no way to check because banks are the only agency that can check the account number.

Banks are not able to handle the load of validating lakhs of IPO application data for every IPO in a short period. Thus they don't send the confirmation and in the process, some people are getting benefited.

As per the registrar, a few applications fall under the category of 'not-validated 3rd party bank account'. They are not ready to share the actual percentage of these applications.