What is a Mainboard IPO? - Detailed Guide

A Mainboard IPO (Initial Public Offering) refers to the public issue of shares by large, well-established, and reputed companies that want to raise capital by listing on India’s leading stock exchanges – the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). These companies are usually leaders in their industries with a proven business model, good financial track record, and high investor interest.

Compared to SME IPOs, Mainboard IPOs come with higher issue sizes, broader investor participation, and stricter eligibility requirements under the guidelines of the Securities and Exchange Board of India (SEBI). Investors prefer these IPOs because of the stability, transparency, and liquidity they provide.

In simple words, a Mainboard IPO allows common investors like you and me to buy shares of India’s top companies even before they get listed, giving us the opportunity to participate in their future growth stories.

History and Evolution of IPOs in India

IPOs in India have been around for decades, but the market has evolved significantly in the last 25 years. Earlier, IPO applications were completely paper-based, involving physical forms and cheques. With the introduction of Demat accounts in the late 1990s andonline banking systems, the process has become entirely digital.

The landmark IPOs of companies like Infosys (1993), Coal India (2010), and Reliance Power (2008) brought massive investor participation and shaped the IPO culture in India. Today, IPOs are considered one of the fastest ways for companies to raise capital and for investors to generate wealth.

Eligibility Criteria for Mainboard IPOs

SEBI has set specific rules for companies that want to launch a Mainboard IPO. Some of the key requirements include:

Net Tangible Assets: At least ₹3 crore in the previous 3 years.
Average Operating Profit: ₹15 crore in the last 3 years.
Net Worth: Not less than ₹1 crore in the last 3 years.
Distributable Profits: Profits in at least 3 out of the last 5 years.
Post-Issue Capital: Minimum of ₹10 crore after IPO.

IPO vs SME IPO vs FPO

Mainboard IPO: Large companies raising big-ticket funds, listed on BSE/NSE.
SME IPO: Small and medium-sized enterprises listed on SME platforms (NSE Emerge, BSE SME).
FPO (Follow-on Public Offer): When an already listed company issues more shares to the public.

Understanding the difference helps investors choose the right type of opportunity based on their risk appetite and investment goals.

How to Apply for Current Mainboard IPOs in India?

Applying for a Mainboard IPO is now completely online, making the process fast and seamless. You only need two things: a valid Demat Account to hold shares and a UPI ID to make the payment. Follow these simple steps:

Log in to your trading app (Zerodha, Upstox, Groww, Angel One, Motilal Oswal, etc.).
Browse the list of active IPOs and select the company you want to apply for.
Check details like issue size, price band, financials, and objectives.
Enter number of lots and bid price within the band.
Confirm application and approve mandate via UPI app.
Funds stay blocked until allotment is done.
Track allotment via registrar website or your broker app.

Benefits of Investing in Current IPOs

Early Entry: Buy shares before listing on exchanges.
Listing Gains: High probability of premiums on listing day.
Long-term Returns: Companies like Infosys and HDFC Bank created multibagger wealth post IPO.
Transparency: Strict SEBI guidelines ensure investor safety.
Diversification: Exposure to new sectors and industries.
Corporate Governance: Listed companies follow disclosure norms, making them more reliable.

Risks of Investing in IPOs

Uncertainty: No guarantee of listing gains.
Market Volatility: External events may impact IPO pricing.
Overvaluation: Some IPOs are priced too high.
Allotment Issues: Oversubscription reduces chances of allotment.
Business Risks: Poor sector performance can hurt share prices.

Tax Implications of IPO Investments

Many investors overlook taxation on IPO gains. Here’s how it works:

Listing Gains: If sold within 1 year, profits are considered Short-Term Capital Gains (STCG) and taxed at 15%.
Held Over 1 Year: Gains above ₹1 lakh fall under Long-Term Capital Gains (LTCG) and are taxed at 10%.
Dividend Income: Taxable as per your income slab.

Tips for First-Time IPO Investors

Don’t apply blindly – always read the RHP (Red Herring Prospectus).
Check the company’s PE ratio compared to peers.
Invest only in businesses you understand.
Don’t put all money in one IPO – diversify.
Avoid hype-driven investing. Focus on fundamentals.

Case Studies of Famous IPOs

Infosys IPO (1993): Listed at ₹95 and today trades in thousands – one of the biggest wealth creators in India.
Zomato IPO (2021): Created huge listing gains, attracting millennials to IPO investing.
Reliance Power IPO (2008): Despite record subscription, it failed to deliver long-term returns – showing the importance of valuations.

Frequently Asked Questions (FAQ) about IPOs

Q: Can NRIs apply for IPOs?
A: Yes, NRIs can invest via NRE/NRO accounts with a Demat account.
Q: What is the minimum investment?
A: Usually ₹10,000–₹15,000 per lot.
Q: Can I sell IPO shares immediately?
A: Yes, once shares are credited in your Demat account post-listing.
Q: Is applying in multiple IPOs allowed?
A: Yes, there is no limit as long as you have funds.
Q: Do I need documents?
A: No, only Demat, PAN, Aadhaar-linked bank account, and UPI.

Apply for a Mainboard IPO Today

If you want to invest in India’s top companies and participate in their growth journey, Mainboard IPOs are one of the best opportunities. With just a Demat account and UPI, you can start applying today. Don’t miss the chance to diversify your portfolio with some of the most promising businesses in the country.

Apply for IPO via Demat Account