If your company is launching an IPO, you may be eligible to apply under the employee quota category. This category allows employees to apply separately from retail investors and may also offer a discount on the issue price.
In this guide, you will learn exactly how to apply IPO in employee quota, using both broker apps and the ASBA bank method.
Let’s get straight to the process.
Step 1: Check If You Are Eligible
Before applying, confirm eligibility in the IPO’s Red Herring Prospectus (RHP).
Generally eligible:
- Permanent employees of the issuing company
- Employees of subsidiaries or group companies (if mentioned)
- Employees on payroll before the cut-off date
If you are unsure, check with your company’s HR department.
What is Employee Quota in IPO?
The employee quota is a reserved portion of shares set aside specifically for eligible employees of the issuing company (and sometimes its subsidiaries or group companies).
This reservation exists to:
- Reward employees for contributing to company growth
- Encourage employee ownership
- Increase participation in the company’s public listing
In many IPOs, employees may also receive:
- Discount on share price (example: ₹45 discount in LIC IPO)
- Separate the allocation pool from retail investors
- Higher probability of allotment compared to heavily subscribed retail quota
Typically, employee reservation ranges from 1% to 5% of the total issue size, though it varies per IPO.
Here is a quick guide to understand “How to Apply for IPO in India?”
Benefits of Applying Under Employee Quota
Applying in the employee category can provide several advantages:
✔ Discounted share price
Many IPOs offer employees a price discount, improving the listing’s potential.
✔ Better allotment probability
Since fewer people apply in employee quota compared to retail, oversubscription is often lower.
✔ Separate allocation pool
Employee applications do not compete with retail investors.
✔ Ownership in your company
Employees get a chance to participate in company growth and long-term wealth creation.
However, remember:
Employee quota does NOT guarantee allotment.
If the employee portion is oversubscribed, allotment still happens via lottery or proportional basis.
Step-by-Step: Apply for IPO in Employee Category Using Broker App
You can apply through any major broker platform, such as Zerodha, Upstox, Groww, Angel One, or others.
Below is the typical process.
If you don’t have a Zerodha account, here is a quick guide to opening a Demat account.
Step 1: Open the IPO section in your broker app
- Log in to your trading app
- Navigate to IPO / Bids / Investments section
- Select the active IPO
Step 2: Select Investor Type as “Employee”
- Choose Employee instead of Individual Investor.
- Enter the required employee identification details if asked
Step 3: Enter bid details
- Select some lots
- Choose the cut-off price (recommended for beginners)
- Enter your UPI ID linked to your bank
Step 4: Submit and approve the UPI mandate
- Submit the application
- Approve the UPI request in your UPI app
- Funds will be blocked, not deducted
Once approved, your IPO application is successfully submitted.
How to Apply for IPO Employee Quota Using ASBA (Bank Method)
You can also apply using ASBA (Application Supported by Blocked Amount) through your bank’s net banking.
Most major banks support ASBA:
- SBI
- HDFC Bank
- ICICI Bank
- Axis Bank
- Kotak Bank
New Version SBI Application
Step 1: Log in to Yono net banking: How to apply ipo in employee quota?
Go to: Investment – IPO
Step 2: Select the Type of IPO
Step 3: Enter Application Details
Old Version SBI Application
Step 1: Log in to net banking
Go to:
e-Services → Demat / ASBA / IPO services
Step 2: Select the IPO
Choose the IPO currently open for subscription.
Step 3: Choose category as “Employee”
- Select Employee category
- Enter DP ID / Client ID if required
Step 4: Fill in bid details
- Enter lot quantity
- Select price or cut-off
- Confirm submission
Funds remain blocked in your account until allotment.
- If allotted → amount debited
- If not allotted → funds are released automatically
Bank interfaces differ slightly, but the process remains similar.
Does Employee IPO Guarantee Allotment?
No.
Employee quota improves chances but does not guarantee allotment.
Allotment depends on:
- Number of employee applications
- Size of employee reservation
- Oversubscription level
If demand exceeds supply, allotment happens through:
- Lottery system (small applications)
- Proportional basis (large applications)
Common Mistakes Employees Should Avoid
❌ Applying in the wrong category
If you apply in retail instead of employee, you lose your reservation benefit.
❌ Using incorrect employee details
Mismatch can lead to application rejection.
❌ Ignoring IPO fundamentals
Employee quota doesn’t mean the IPO is good. Always check:
- Company profitability
- Debt levels
- Valuation vs peers
- IPO purpose
❌ Overinvesting just because it’s your company
Employees sometimes get emotionally attached; avoid that. Treat it like any investment decision.
Frequently Asked Questions (FAQs)
Can ex-employees apply in employee quota?
Usually no, unless specifically allowed in the prospectus.
Can family members apply in the employee category?
No. Only eligible employees can apply.
Can I apply in both the retail and employee categories?
Generally, no. Multiple applications may be rejected.
Is an employee IPO always profitable?
Not always. Listing gains depend on valuation and market demand.
What happens if I don’t get allotment?
Your blocked funds are released automatically.
Final Thoughts
Applying in the IPO employee category can be a smart opportunity if your company is going public – especially when a discount and reserved allocation are offered.
But don’t apply blindly.
Always evaluate:
- Company fundamentals
- IPO valuation
- Market conditions
Use employee quota as an advantage, not as a shortcut.
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