UPI IPO Application

UPI IPO Application is an alternative to the ASBA IPO Application wherein an investor uses UPI ID as a payment option while subscribing for IPO.

UPI is short of Unified Payment Interface. UPI is a platform build by the National Payments Corporation of India (NPCI) to simplify retail payments and settlement systems in India. It is an initiative by RBI and the Indian Banks Association (IBA).

The UPI IPO application allows you to apply in an IPO directly from your broker (i.e. Zerodha, Sharekhan or Angel). But it requires an additional step of approving the fund block mandate request in BHIM or net-banking mobile app. This additional step makes this process cumbersome. The overall process is not as fast as the ASBA IPO application due to an additional layer added.

Parties involve in UPI IPO Application

1. Broker (IPO Application Software)
2. Exchanges (NSE & BSE IPO Bidding Platform)
3. UPI Platform
4. BHIM or Net-Banking Application
5. Registrar
6. Depositories (CDSL or NSDL)

UPI IPO Application Process

UPI IPO facility is offered by the brokers who don't have a banking license. In this case, the IPO applications are made using UPI id. The customer has to follow a few additional steps to accept the UPI mandate using the net banking app or BHIM app.

Steps to apply in IPO using UPI

1. Create a UPI ID using the net banking app or BHIM app on your phone.
2. Visit the IPO website or Mobile App offered by your broker.
3. Select the IPO and click the Apply button.
4. Fill the form and submit the UPI ID as a payment option.
5. The broker sends the IPO application to the exchange.
6. You will receive a block mandate request on your UPI App (Net-banking or BHIM). This may take up to 24 hrs.
7. Login to net-banking or BHIM and approve the mandate request.
8. The funds get blocked in your bank account.
9. Exchange sends application data to the registrar after the issue closes.
10. Registrar allocates the shares.
11. Funds are withdrawn or unblocked from the bank account.
12. Registrar transfers the shares to your demat account.

UPI IPO Mandate

UPI IPO Mandate is a request on a smart phone app to block the fund for an IPO application.

When you apply for an IPO using UPI ID as payment option, you receive a fund block mandate request on the app where he has setup his UPI ID i.e. net-banking or BHIM app.

Steps to accept UPI IPO Mandate

1. Login to your net banking app or BHIM App
2. Go to UPI Section >> My Mandates page
3. Check Request Received. If you do not see the request, try after few hours.
4. Validate and accept the request

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UPI IPO Timing

An investor can apply in an IPO using UPI as a payment gateway at any time while the public issue is open for bidding.

UPI IPO Limits

• An additional step to follow for approving the fund block mandate request.
• This facility is not available to Minor, HUF and Corporate accounts.
• Once you accept the UPI mandate, you cannot modify the bidding details in the IPO application. To modify, you have to cancel and create new IPO application.
• The exchange's bidding platform runs only on week days. If you apply in IPO over the weekend, you will receive the UPI mandate request only on next working day.
• Mandate for fund blocking usually comes after few hours after submitting the IPO application. This result in to unnecessary waiting and confusion.
• In some case the UPI mandate requests fail due to technical issue or while approving it.
• Few investors face delay in fund unblocking.

UPI IPO Application Benefits over ASBA

• Apply for IPO through any broker including discount stock brokers like Zerodha and Upstox.
• You can apply in an IPO till 5 PM on issue closing day.
• Similar to ASBA, UPI IPO application is free.

UPI IPO Refund

The funds blocked for UPI based IPO application is released on the day of IPO allotment, if none or partial allotment is received.

What if funds are blocked even after allotment?

Your funds get automatically unblocked and credited to your account with the expiry of the mandate request period if the bank failed to unblock them on the allotment date.

At the time of accepting the fund block mandate request, you also specify the validity of the request as per the below screenshot. If for any reasons, the funds are not unblocked on the allotment date, the fund will surely released when the fund block request expires.

You could also reach out to the bank to unlock the funds.

UPI IPO Banks

Almost all large national level banks offer UPI based IPO Applications. This includes both private and public sector banks.

You can check list of permitted apps & banks for UPI IPO Application.

Answered on 2023-08-08