Minors can apply for IPOs too!

3 mins read
by Angel One

IPOs are definitely one of the most famous investment vehicles for equities – wouldn’t you agree? You would have read about them in newspapers or seen advertisements or maybe even overheard a conversation about them during your daily office commute. What makes them so popular is the fact that they are really easy to invest in, offer long-term wealth creation potential, have enormous amounts of research and data available to help investors decide, are good opportunities to generate listing gains, among other advantages.

IPOs can also prove to be a favourable investment for your child’s future; here’s why we think so:

  • Along with being another opportunity to begin investing early, this would be a good moment for you to explain to your child the importance of saving & how it has the potential to create wealth over the long term.
  • You can claim an annual exemption of ₹1,500 per child for any income earned from investments made in a minor’s name under Section 10 (32) of the Income Tax Act, 1961.
  • Minor means someone who is below the age of 18 years. While this age differs as per country, in India, 18 years is considered the age of adulthood.

How to apply for an IPO in a minor’s name

Before shortlisting the IPOs you want to add to your minor’s portfolio, we suggest you begin by getting these requirements in place:


Once these requirements are in place, you can complete the IPO application like you usually do.

Do remember, that you can submit only 1 Application per PAN – per Bank Account.

What happens when the minor turns 18?

On completion of 18 years of age, the minor can choose to either:

  • Convert their minor Demat account to a major one by replacing the details of their parents/guardian with their own, OR
  • Close the minor account and open a new one

Should you invest in IPOs using your child’s name?

Whether IPOs or else, it is important to clearly understand why you are choosing a particular investment. For instance, if you are looking at making an early start towards your child’s financial future, then you probably do realize that IPOs have the potential to generate wealth over the long term. However, if you are looking for tax relief by investing in IPOs in the name of your child, then you should remember that any income that gets generated will anyway get clubbed with that of the parents. And then accordingly you will need to pay the requisite tax.

Evaluate your objective and purpose before you make any investment decision – especially considering your child’s future.