Applying in online IPOs using UPI

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Process or steps to apply in IPOs through Broker’s website using UPI.

  • Install UPI 2.0 enabled app.
  • Create UPI ID and m PIN and linked to your bank account which is linked to your trading account with your broker.
  • Login to broker’s back office and select IPO from the menu.
  • Select the IPO you want to apply for from the list of open issues.
  • Check the details of the offer, like open date, close date, issue size, lot size, and DRHP for the IPO selected.
  • Enter your UPI ID linked to your bank account.
  • Place your bid(s) only in the multiples of lot size.
  • Now click on the checkbox for the cut-off price, if you wish to apply at the cut-off price.
  • For placing a bid at any other price, enter a price in the ‘Price’ field.
  • Check the agreement at the end and submit.
  • Next, you will receive a mandate request on your UPI app in few hours.
  • Accept the mandate. This will block the funds required for the application in your bank account until the date of allotment (2 days before the listing date).
  • If you receive an allotment, the money is debited from your bank account and shares are credited to your demat account.
  • If you don’t receive an allotment, the blocked funds are released on the date of allotment.

 

Why one need to apply in IPO with UPI?

    According to the new mandate from SEBI (phase II onwards), since July 2019, retail individual investors (RII) submitting application form through intermediaries i.e. Syndicate Member or Registered Stock Brokers or Registrar and Transfer or Depository Participants have to necessarily use UPI as a payment mechanism. (SEBI Circular )

    This is to streamline the process of applying in IPOs, recently the SEBI has now made it mandatory for all IPOs to be supported by UPI 2.0. With this, now the retail investor can use UPI ID for blocking the funds while subscribing for IPO online on NSE and BSE and directly apply through the broker’s website. You can check the list of apps and banks which support UPI IPO currently on NPCI's website here.

Important Points from SEBI circular for using UPI as a mode of payment for IPOs

  • The payment for Applications through UPI in IPOs can be made only through the SCSBs mobile applications (apps) whose name appears on the SEBI website.
  • An investor shall ensure that when applying in IPO using UPI, the name of his Bank appears in the list of SCSBs displayed on the SEBI website which are live.
  • An application made using incorrect UPI handle or using a bank account of an SCSBs or bank which is not mentioned in the list is liable to be rejected.
  • Investors whose bank is not live on UPI, may use the other alternate channels for investing in IPOs viz. submission of application form with SCSB through ASBA or using the facility of linked online trading, demat and bank account.

Unified Payments Interface (UPI)

    The Unified Payments Interface (UPI) is an instant smart-phone enabled inter-bank electronic fund transfer service available through your bank. It is developed by the RBI regulated entity “National Payment Corporation of India (NPCI).” It allows inter-bank transfer of money between any two bank account without even adding payee to your account. It can now be used for blocking money for IPO Applications.

UPI ID or VPA

    UPI ID is a unique identifier like email id created by you which is mapped to your bank account and can be used to send or receive payments in BHIM / UPI system. You can create UPI ID by login on to your account in your bank's mobile App and then click on UPI and register a UPI ID of your choice.

Creating UPI ID

    UPI ID or Virtual Payment Address is to be created with SCSBs eligible to act as an Issuer Bank. The list is there on the SEBI website. It can be created by either of the following ways.

    • Create UPI id with the BHIM app by linking your bank account.
    • Or create UPI id with your bank directly if your bank has UPI-enabled mobile application.

    The list of apps where you can create UPI ID is provided here. For updated list, please check (SEBI website). The banks that you want to have UPI ID for but do not have UPI enabled app can use BHIM app. Thus you can create UPI ID with all other SCSBs with the help of BHIM App.

    • BHIM (android & iOS) : @upi
    • BHIM Axis Pay (only android) : @axisbank
    • BHIM SBIPay (only android) : @sbi
    • Citi Mobile (android & iOS) : @citi & @citigold
    • HDFC Bank Mobile (only android) : @hdfc
    • HSBC Simply Pay (android & iOS) : @hsbc
    • iMobile by ICICI Bank (android users) : @icici
    • Phone-Pe (android & iOS) : @ybl

How to create UPI ID from BHIM App and what are the prerequisites to get BHIM UPI ID?

 

    The prerequisites to get UPI ID are:

    • Smartphone to download BHIM App.
    • Bank Account to link it with.
    • Mobile no registered with the same bank.
    • Debit card linked to your bank account to set the pin.

    Now to create the UPI ID using BHIM app, follow these steps:

    • Download BHIM (android & iOS) app from Google play store or Apple app store.
    • Select your preferred language.
    • The app will ask permission to send SMS to verify.
    • Successful attempt will take you to Home page.
    • If unsuccessful, after 45 seconds an OTP will be sent to you.
    • Once NPCI recognizes your mobile number and handset, your registration is complete.
    • On successful registration, a default ID i.e. [email protected] will be created.
    • You can add one more VPA by going in the profile section.

How to create the UPI ID and m PIN using UPI-enabled bank account app?

  • Download bank’s UPI-enabled mobile application from Google play store or Apple app store.
  • Go to ‘create UPI’ on home page.
  • Enter name, choose id you like and click create.
  • Now set the mPIN which is required to make payment through UPI.
  • Click on create m PIN. An OTP will be sent to your registered mobile no.
  • Enter the last six digits of your debit card and the expiry date of your debit card to set the m PIN.
  • Now create m PIN for your UPI which is a 6 digit or 4 digit number of your choice.
  • Click submit and your mPIN will be generated.

Last updated on 10th Oct 2019

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FAQs

  1. Up to what limit can I apply for an IPO in UPI?

    For retail investors, the limit for IPO application is 2 lakh per transaction on UPI.

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  2. Is use of UPI, as a payment mechanism in IPO, mandatory?

    The applicability of UPI as a payment mechanism has been prescribed in a Phased manner as under:

    • Phase I

      From January 01, 2019, the UPI mechanism for retail individual investors through intermediaries will be made effective along with the existing process and existing timeline of T+6 days. The same will continue, for a period of 3 months or floating of 5 mainboard public issues, whichever is later.

    • Phase II

      Thereafter, for applications by retail individual investors through intermediaries, the existing process of physical movement of forms from intermediaries to Self-Certified Syndicate Banks (SCSBs) for blocking of funds will be discontinued and only the UPI mechanism with existing timeline of T+6 days will continue, for a period of 3 months or floating of 5 mainboard public issues, whichever is later.

    • Phase III

      Going forward, the listing time of IPO shares will be reduced to 3 working days from the issue close date using the UPI mechanism.

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  3. Which Discount Broker is providing services to invest in IPOs online through them using UPI?

    Discount Brokers like Zerodha, Trade Plus are providing a facility to invest online in IPOs using their back-office software and UPI mode of payment.

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  4. How much is the charges to use UPI payment mechanism for IPO?

    There are no transaction charges applied for using UPI mode of payment. Still, you need to get in touch with your respective bank for details of charges, if any.

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  5. What to do if my bank is not providing UPI service for IPOs?

    In case your bank is not providing UPI services for IPO, you have to submit an application through ASBA process of your bank.

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  6. How many IPOs can I apply from one UPI ID?

    There is no restriction for you from UPI on the number of applications using the same UPI ID.

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  7. Can I use third party UPI ID or a third party bank account for making payment in IPO?

    No. Applications made by retail investors using third party UPI ID or by any category of investors using a third party bank account are liable for rejection.

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  8. What if I do not want to proceed with the IPO application after submission with intermediary?

    Retail individual investors can withdraw bids till issue closure date. During the bidding period you can approach your broker form for withdrawal.

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  9. Can I withdraw my bid? If yes, how?

    Retail individual investors can withdraw bids till issue closure date. During the bidding period, you can approach the same intermediary to which you had submitted the application form for withdrawal.

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  10. How do I know that the collect request from IPO is not fraudulent?

    The collect request from IPO is not fraudulent in case the UPI ID is marked as a “verified merchant”. Please look out for the indication of a Verified Merchant tag when you receive the request on you App for blocking the amount that you have BID in the IPO. The request is received as a collect request on your UPI enabled App. Further also please verify the details including your Bid-cum application number, amount and other bid details received during the collect request.

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  11. Till what time shall my money be blocked in IPO?

    The money will be blocked till the finalization of allotment, post which the amount equivalent to allotted shares would be debited and balance amount (in case of partial allotment) will be unblocked.

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  12. Where can I check the status of an active IPO mandate on my UPI App?

    The status of the active IPO mandate can be viewed in the mandate section of your UPI app.

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  13. How do I know if my bank is providing IPO services through UPI?

    Customer can reach out to www.npci.org.in for the list of Banks available for the IPO Service on UPI.

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  14. What if I do not have sufficient balance in my bank account while accepting the IPO mandate?

    Transaction will be declined in case the account has insufficient funds.

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  15. If my bank is not live on IPO but my UPI application supports the same, can I still apply?

    No, to apply using UPI, the bank where you hold an account linked to your UPI App also needs to be eligible to act as an Issuer Bank for UPI in the IPO process. The list of such bank is available on website of SEBI.

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  16. What happens if I don't get a mandate from the Intermediary on the UPI that has entered in the IPO?

    You need to contact your broker for re-initiating the process. You may also like to check whether the UPI ID is correct or not.

    Discuss this question

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  2019-10-09T11:09:23+00:00






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