Can both the holders of joint demat account apply individually for an IPO?

They can't.

These are the rules:

Individuals Joint Bids

Bids can be made either in one name or jointly. Joint Bids require that the Bid cum Application Form only contain the name of the First Bidder. This name should also be listed as the first holder for the beneficiary accounts held in joint names. Only such First Bidder is required to sign the Bid cum Form. Joint holders would consider such a signature as having been signed for them.

Multiple Bids

For the required number of Equity shares, a Bidder must submit one bid.

Notable: The name of the sole/First Bidder must match the one in the depository records. If multiple Bids are submitted, the Bid cum Application Form must only include the first Bidder's name. This should include the beneficiary account's first name.