Yes and no at the same time. Although you can apply for an IPO without a Demat Account in some cases, the allotted shares are tradable through a Demat Account, Thus, a Demat account is recommended for an IPO.
As an investor, you can avail yourself the option to apply for an IPO and receive the shares through physical form. However, it is recommended to get the shares in Demat form as the allotted shares through an IPO are only tradable in the Demat form.
In any case, an IPO having a security size of 10 crore INR or more mandatory to have a Demat account to apply. The allocated IPO shares will be transferred to the Demat Account of the Investor. Thus, you must provide the correct DP ID along with the Client ID in the bid/application form.