Chittorgarh.com
Free Trading + Demat Account

UPI for IPO Application (UPI Payment Option) Explained

Published on Friday, January 4, 2019 by

UPI for IPO Application (UPI Payment Option) Explained

UPI means Unified Payments Interface. It is an instant payment system on the mobile platform. It offers inter-bank transfers between any two persons' bank accounts i.e. sending or receiving money in real-time among banks in India. In addition, UPI also allows blocking money for special purposes like IPO applications.

The National Payments Corporation of India developed UPI. It is regulated by the RBI.

In late 2018, SEBI permitted UPI as an alternative payment option for retail investors (Up to Rs 2 Lacs) to invest in IPO.

How UPI will help the IPO Process?

  • To bring down the time it takes from issue closure to the listing to 3 working days.
  • Like ASBA process, the money will remain blocked in the bank account until the allotment.
  • Investors can apply in IPO online through any broker (including discount brokers).
  • No limitation to apply IPO online only through few banks i.e. ICICI, SBI or HDFC.
  • Reduce the need for manual intervention at various stages in the IPO process.
  • Increase efficiency by streamlining the amount locking.

UPI IPO Application Process flow

For Investor:

  1. Create the UPI ID at the bank
  2. Enter the bid details in the online IPO application form
  3. Enter UPI ID and submit the form
  4. In background:

  5. The stock broker upload bid details to the stock exchange.
  6. The stock exchange validates PAN and Demat account details of the investor with NSDL/CDSL.
  7. Post validation, the stock exchange share the bid details along with investors UPI ID to the designated IPO merchant banker (sponsor bank).
  8. The sponsor bank requests the investor to authorize blocking of funds through UPI app.
  9. Investors receive notification on UPI App as well as email linked to UPI ID
  10. For Investor:

  11. Investor to confirm UPI request to block funds.
  12. On finalization of basis of allotment, the funds are withdrawn from the bank account and the remaining amount is unblocked.

Implement Stages (UPI Payment for IPO Application)

UPI payment option for IPO application will be implemented in phase as mentioned below:

  • Phase I:

    From January 2019, the UPI is optional for Retail & Shareholder Category Investors. It will work along with the existing ASBA process. The listing of IPO shares will take 6 working days from the date of closure of the IPO.

  • Phase II:

    From March 2019 or after 5 mainboard IPO, the UPI will be mandatory for Retail & Shareholder Category Investors. The listing of IPO shares will still take 6 working days from the date of closure of the IPO.

  • Phase III:

    UPI to be mandatory for Retail & Shareholder Category Investors with up to Rs 2 Lacs for all IPO applications. The listing of IPO shares will reduce to 3 working days from the issue close date.

Note:

  • The UPI payment option is only for Retail & Shareholder Category Investors (Up to Rs 2 Lacs)
  • IPO application payment through UPI will be available for all equity IPO from Jan 1st, 2019.

IPO UPI Application Process Detail (Step by Step Guide)

  1. Investor submits the form to broker with demat account detail, bid detail and UPI ID.
  2. Broker accepts the form and provides an acknowledgment to the investor.
  3. Broker uploads the application on Exchange.
  4. Exchange to validate investors demat account details with Depository (CDSL or NSDL).
  5. In case of a mismatch, the exchange provides mismatch details to the broker
  6. Broker to modify mismatches PAN or DP Details
  7. Exchange to provide UPI details to Sponsor Bank.
  8. Sponsor Bank provides status Accepted / Decline / Pending (Fund Blocking Details) to Exchange.
  9. Investor authorizes Blocking of Funds through Mobile UPI APP, equivalent to application amount.
  10. IPO registrar (i.e. Karvy, Link Intime) receives final bid book from Exchange.
  11. IPO registrar finalize basis of allotment (T+1 to T+2 )
  12. Sponsor Bank unblocks funds for non-allotted shares. (T+4 )
  13. Depositories credit shares (T+4/5 )
  14. IPO lists on stock exchanges (T+6)
UPI IPO Application Process Flow Diagram

Rate this article
5
4.2
Rating:Rated 4.2 stars

Vote Here ...

Save 60% to 90% on Brokerage Fee

We can help you save over 60% in brokerage fee.

Name:Phone
EmailCity
State
Are you a day trader?

User Comment

No record Found

special_offers
By Popular Stock Brokers
Zerodha Review   Zerodha
    The Discount Stock Broker

Free Equity Delivery Trades
Flat ₹20 Per Trade in F&O

Enquire Now

2nd largest stockbroker by the no. of clients.

5paisa Review  5paisa
    Fast Growing Discount Stock Broker

Trading at Flat ₹10 Per Trade

Instant - Online Account Opening

GET FREE Demat Account

ProStocks Reivew
    ProStocks
    Flat Fee Discount Broker

Flat ₹15 per Trade
Lowest Transaction Charge
Lowest Stamp Duty

FREE Trading + Demat Acct

Angel Broking Review   Angel Broking
    Leading Retail Broker in India

₹0 account opening fee +
20% off on online trading

Request Instant Call Back

Beginner, seasoned investor, active trader or HNI. Get customised solutions.

₹0 account opening fee on Online Trading + Demat Acct
(₹1150 waived)

Request Call Back




Message Board

Stock Message Board


Search Chittorgarh.com:

Chittorgarh.com Mobile Apps:

Download Android App Downlaod iOS App