How many entities does it take to process an IPO application?

There are 9 entities involved in the IPO process - apart from the investor & the issuing company.

You first submit your IPO application to your Stockbroker, who sends it to the Stock Exchanges [NSE & BSE]. The Stock Exchange validates your PAN & demat account details with the Depositories [NSDL & CDSL]. The application is then sent to the issuing company’s bank, i.e. the Sponsor Bank.

At this stage, the UPI leg of the transaction starts. The Sponsor Bank triggers a UPI mandate request that reaches your UPI app through NPCI’s switch. Once you enter your PIN, your bank blocks the subscription amount in your bank account.

The registrar of the company considers the blocked amount to perform allotment of shares in the IPO. Once the IPO closes, the funds are collected by the Sponsor Bank and given to the issuing company.

All of this activity & other compliance actions get tracked and acted upon by the Merchant Banker to the IPO. Here is what the IPO application flow looks like -

P.S. I have assumed you are using UPI to apply. However, the flow is similar even in the case of ASBA applications.