Rohan just started his first job in Guwahati, and a cousin's WhatsApp forward has him convinced he found a loophole: open three demat accounts before the next hot IPO, apply for one lot from each, and triple his odds of getting shares. It feels clever. It is also one of the most common IPO myths going around, and the reason it keeps circulating is that the logic sounds airtight right up until someone actually tries it.
Why Everyone Thinks More Accounts Means More Chances
The instinct isn't a dumb one. In a lottery, more tickets genuinely do mean better odds, and a hot IPO really does work like a lottery once it's oversubscribed. Shares get allotted through a computerised draw among everyone who applied, so "apply more times" sounds like the obvious way to load the dice in your favour.
The part that breaks is the assumption baked into that logic: that three demat accounts count as three separate entries. They don't. The registrar running the draw counts something else entirely, something a lot harder to duplicate than an account.
What Actually Decides Whether Your Application Counts
Every demat account you open is tied to your PAN, and it's PAN, not the demat account or the broker you used, that the registrar checks before the lottery even runs.
Key takeaway
SEBI's rule is one PAN, one application, per IPO, and that includes every category, not just retail. Three demat accounts opened under the same PAN still count as one identity to the registrar, and the moment a repeat shows up, every application linked to that PAN gets rejected before the allotment draw runs, not just the extra ones.
That "same identity" part is stricter than most people realise, because it isn't optional. Under Section 139A of the Income Tax Act, you're legally allowed exactly one PAN. Holding a second one, even by accident, carries a ₹10,000 penalty under Section 272B. So the three-demat-account plan was never going to produce three identities in the first place. It was always going to produce one PAN, photocopied three times.
Same Person, Three Accounts, Here's What Happens
Say the IPO Rohan is excited about carries a price band of ₹95 to ₹100, with a lot size of 150 shares. At the cutoff price, one lot costs ₹15,000. He opens accounts with three different brokers, each with its own bank account and UPI ID that he genuinely owns, and applies for one lot from each on IPO day. Total money set to move: ₹45,000, blocked through a UPI mandate in each of his three bank accounts rather than debited outright, standard practice for any IPO application.
Before the allotment lottery runs, the registrar de-duplicates every application by PAN. All three of Rohan's applications carry the same PAN, so all three get flagged and technically rejected. Not reduced to one valid entry. All three thrown out. The ₹45,000 gets unblocked and sits back in his accounts exactly where it started. He doesn't end up with worse odds than a single applicant. He ends up with zero applications in the draw, including the one that would have been perfectly valid on its own if he'd stopped there.
That's the actual risk hiding inside the title of this piece. It isn't that the extra accounts do nothing. It's that they can cost you the one shot you already had.
The Move That Actually Works
Here's what's actually different about applying through a family member: the PAN itself changes. Nothing else in the three-demat-account plan mattered as much as that one detail.
If Rohan's mother has her own PAN, her own demat account, and her own bank account with its own UPI ID, and applies for the same IPO independently, that's a second, completely separate entry in the registrar's eyes. Nothing about her application references Rohan's PAN at any point, so there's nothing for the de-duplication check to catch. A household of four people, each with their own PAN, demat account, and KYC on file, can put in four independent applications for the same IPO, simply because four different people are actually applying.
What People Get Wrong About "The Family Trick"
The family route is real, but it quietly fails in the same way the multiple-account plan does if you get the details wrong.
Open more demat accounts in your own name to apply more times.
One PAN means one application per IPO, no matter how many demat accounts or brokers you use.
Use one shared family bank account or UPI ID so everyone's application goes through the same place.
Each application's UPI ID has to be linked to a bank account held by that same applicant, or it gets rejected too.
Any family member's account works as long as the name is roughly the same.
A spelling mismatch between your PAN, demat account, and bank account name can trigger a rejection on its own, with nothing to do with duplicate PANs.
The pattern underneath all three rows is the same one from earlier. The registrar cares whether the identity behind an application is truly singular, all the way through PAN, demat, and bank account. A shortcut like a shared UPI ID reintroduces exactly the ambiguity the whole system exists to catch.
Where to Go From Here
If the difference between a PAN, a demat account, and a bank account still feels a little blurry, that's worth sorting out before the next IPO you're eyeing opens, because everything in this piece rests on those three staying distinct and correctly linked. TraderStack's deeper explainer on demat accounts covers what one actually holds, how it differs from a trading account, and what the account-opening charges look like.