Since 2018, a lot has changed in the stock market in India. Prior to this year, investors mostly applied for shares through bank forms or net banking. The SEBI launched the IPO Unified Payment Interface (UPI). This made the process quite fast. It has now become possible to apply for an IPO in a few minutes using your smartphone.
What is a UPI IPO Application?
UPI stands for Unified Payments Interface. It is a system that transfers money instantly between bank accounts. This system is handled by the National Payment Corporation of India (NPCI). The UPI IPO application means you use your UPI ID to block the application money.
With this technique, the money does not leave your account immediately. Rather, the bank marks that amount as blocked. There is no way you can use this money elsewhere until it is unblocked or used in case of IPO allotment. The bank deposits the money into the company in case you get the shares. In case you are not issued shares, the bank unblocks the money for your use.
How to Make UPI IPO Application
You can apply through your stockbroker’s app or by using a physical form. The two methods need a valid UPI ID.
The Online Process
This is the most popular way for UPI IPO application, since it is highly convenient.
- Install a UPI application such as Google Pay, BHIM, or Paytm.
- Create your unique UPI ID and set a secure PIN.
- Log in to the trading application or site of your broker.
- Go to the “IPO” section and select the current issue.
- Add your bid details, such as the number of shares and price.
- Fill in your UPI ID and submit.
- Wait for a notification on your UPI app.
- Open the UPI application and accept the mandate by entering your PIN.
- That’s it! Your UPI IPO application is done.
The Offline Process
UPI IPO payment is possible even if you want to use paper instead of the online process
- Get the physical form from IPO INDEX, a broker or by downloading it at NSE/BSE.
- Enter your name, PAN and Demat account number.
- Fill in the quantity and price of bidding.
- Enter your UPI ID in the payment field.
- Hand this form to any broker or a member of the syndicate.
- You will still receive a mandate request on your phone. You must approve it to complete the bid.
Learn: ASBA IPO Online and Offline Process
Understanding the UPI ID
A UPI ID is your virtual payment address. It looks like an email address. The format is usually username@bankname or username@appname. For example, it could be rahul@okicici or 9876543210@paytm. This ID connects your bank account to the IPO application without sharing your bank account number.
Solving Complaints Related to UPI IPO Payment
In case your money is stuck or when you have technical errors, do the following:
- Contact your broker first.
- Contact your bank (SCSB) or IPO Registrar.
- The UPI Dispute Redressal Mechanism is available on the NPCI website.
- If nothing works, file a complaint with SEBI on their SCORES portal.
Handling UPI Mandate Issues
The UPI IPO process does not always go smoothly. In this case, here is what to do in different situations:
| Issue | Solution |
|---|
| Mandate Expired | You will have to re-initiate the transaction or make another application. |
| Request Not Received | Failure to receive the request within an hour implies that you should delete the bid and reapply. |
| Mandate Failed | This normally occurs because of difficulties with bank servers. Cancel the bid and begin all over again. |
| Revoking Mandate | On cancellation of the IPO bid, the money is released instantly. |
Important Limits, Rules, and Timelines for UPI Payments
There are specific limits for using UPI IPO method.
- Only individual investors can use the UPI payment route.
- You can apply for up to ₹5 lakhs per IPO using UPI.
- Retail vs NII: For mainboard IPOs, applications up to ₹2 lakhs are “Retail.” Applications between ₹2 lakhs and ₹5 lakhs are “Non-Institutional Investors” (NII).
- SME IPOs: Small and Medium Enterprise IPOs often have high minimum lot sizes. These can be done using UPI if the total value is less than ₹5 lakhs.
- Your application is only valid after you approve the mandate. If you miss this, the exchange will reject your bid.
Everything in the stock market is a matter of timing. You have to make your payment on time.
- Cut-off Time: The last day of the IPO is 5 PM, which is the official cut-off.
- Broker Buffer: Lots of brokers stop accepting requests by 4 PM or 4.30 PM. This assists in preventing last-minute technical errors.
- Mandate Acceptance: The mandate must be approved on your application before 5 PM.
Checking the IPO Application Status
Your broker or the stock exchange can help you track your bid.
- Pending: You have submitted the bid, but have not approved the mandate.
- Mandate Approved: The money is successfully blocked.
- Uploaded to Exchange: Your bid is now officially with the NSE or BSE.
- Rejected: There was an error in your details or payment.
The allotment status can be checked on the site of the Registrar of that particular IPO. You need to use your PAN number or application number to know whether you got any shares.
Using Popular Apps for UPI IPO: BHIM and Google Pay
1. BHIM (Bharat Interface for Money)
BHIM is a highly trustworthy IPO application.
- Launch the application and go to the IPO section.
- Check the pending tab for mandate requests.
- Always look for the “Verified Merchant” mark before entering your PIN.
2. Google Pay (Gpay)
GPay is quite user-friendly for many people.
- Tap on your profile picture at the top right.
- Select the “Mandates” option.
- Look under the “Pending” tab and click on the IPO request to authorise it.
Glossary for Beginners
- NPCI: This is the organisation that runs UPI in India. It works under the RBI.
- IMPS: This is the system that is used to transfer money instantly, 24/7.
- UPI PIN: This is your secret 4 or 6-digit code. Never share this with anyone. It is used to give the final permission for the money block.
UPI has made the Indian share market accessible to everyone with a smartphone. UPI IPO is a secure and transparent way to participate in the growth of new companies.