How to Easily Apply for IPO via UPI in India?

In India, investing in IPOs has become extremely popular as more and more investors look to take advantage of the potential profit opportunities. Application for IPOs has also become significantly easier with the introduction of UPI for transaction purposes. Now, transactions can be made via UPI, which also makes it easier for the retail investor who can directly apply for IPOs from his bank account.

In this article, we will know the required steps to apply for IPOs via UPI in India. Also, we will understand the recent updates to the process and the potential issues to look out for.

Why Apply for an IPO via UPI?

UPI has revolutionized digital payments in India by way of seamless, quick, and secure transfers. In UPI, one can transfer money straight from his bank account, using only a Virtual Payment Address (VPA), say yourname@upi without revealing the IFSC and bank account details. Thus, simplicity has made UPI an easy choice even for IPO applications, and payment can be confirmed through a mobile phone.

How to Apply for IPO via UPI in India: Step-by-Step Process

Here’s how you can apply for an IPO using UPI:

Get a UPI ID

Make sure that you have a registered UPI ID from any of the payment apps available such as Google Pay, PhonePe, Paytm, or BHIM.
You should link your bank account to the application. Upon this, you will get a UPI ID. This is usually in the format of name@bankname or phonenumber@upi.

Choosing a Broker or Bank Platform

Select an approved broker or bank app that has a platform for online application for the IPO.
Confirm that the interface supports ASBA, an application supported by a blocked amount. ASBA is approved by SEBI .

Sign In to Your Broker’s or Bank’s IPO Section

Log in to your broker or bank’s app or website and go to the IPO section. There, you will see an open IPO list, the Name of the companies listed for IPO, price bands, and opening and closing dates.

Select an IPO and Fill the Application Amount

Select the IPO you want to apply, you will be asked to enter details like,

Bid Quantity: The no. of shares you would like to apply.
Bid Price: The amount at which you are willing to buy the shares. You also have the option of selecting the “cut-off price” under which you would be applying for the shares at the final offer price.
UPI ID: Enter the UPI ID linked to the bank account.

Check and Submit Your Application

Once you fill in the details, double-check the details for correctness and submit the application. UPI ID must be accurate because wrong details can cause payment failure.

Complete the UPI Mandate on Your App

Once you apply to an IPO, you will get a request from the UPI app to “block” the IPO subscribed amount in your bank account. This means that the money will not be deducted; it’s just “blocked” till the allotment happens.

Open your UPI app and see the pending mandate; accept it. Do this before the closing date of an IPO to ensure that your application has been accepted successfully.

Status Check of IPO Application

After applying, you can track your application status through the app of the broker or by logging on to the registrar’s website, Link Intime, or KFintech. If you get the allotment of shares, the blocked amount will be debited from your bank account, and your shares will be credited to the Demat account on the listing date. If you do not get the allotment of shares, the blocked amount will be reversed to your bank account.

Potential Issues with UPI

Even though UPI has made it simpler to apply for an IPO, at times there could be certain issues. Here we will discuss a few of those issues and possible solutions.

Delayed Request for Mandate

A mandate is a payment request on your UPI app to “block” the application amount in your bank account. At times, there could be a delay in receiving the mandate, in such a case wait for a few minutes to receive the mandate or manually check the “Mandates” section in your UPI app.

Here’s how can find “Mandates” in popular UPI apps.

Google Pay: Go to Profile (upper-right corner) and tab on Mandates or Autopay to view any pending or completed mandates.
PhonePe: Go to the History tab, then select Mandates to view any active or pending mandates.
Paytm: Go to the Bank section, and you may find UPI Mandates under Autopay and Mandates.

Failure or Expiry of Mandate

The mandate can fail due to server issues or insufficient funds in the account. Always, ensure that there is sufficient balance in your account before you apply for an IPO. Don’t wait till the closing date of the IPO to apply as there could be a heavy load on the servers. Also, authorize the mandate promptly.

If the mandate expires, you’ll need to reapply before the IPO’s closing time.

Application Rejection Due to UPI ID Errors

Ensure the UPI ID exactly matches your bank-linked UPI ID.

Blocked Amount Not Released After Non-Allotment

If the blocked amount is taking more than the expected time to be released after non-allotment of shares then contact the bank to know the status.

Benefits of Applying for IPO via UPI

Convenience and speed

Using UPI, one can apply for an IPO in minutes. It is thus suitable for retail investors who want convenience.

Payment confirmation

It takes just a minute with UPI to get your payment confirmation. Other methods like net banking may require additional processing time.

Safe Payment method

UPI is secure in terms of blocking large sums of money during IPO applications as it provides two-factor authentication and encryption. Moreover, through the ASBA mechanism, the amount stays in your account till allotment.

Updates to the IPO application process via IPO

Increase in transaction Limit: SEBI has increased the UPI IPO application amount limit from 1 lakh to 5 lakhs. This will enable investors to apply for higher-value IPO via UPI.

Conclusion

Applying for IPO via UPI is a game changer for retail investors, as it is simple, easy, and fast. However, UPI for IPO is just an enabler, as with any investment it is important for a retail investor to understand the company’s fundamentals and the growth prospectus before investing in the IPO. By staying informed and following best practices an investor can most of the IPO opportunities in India.

Happy IPO Investing!