How to Apply for IPO using UPI ID

Today, UPI has become an essential tool while transferring funds or paying your bills. Just a few taps on your mobile phone, at any time of the day, and you can make any kind of payment you need. For better convenience, now you can apply for an IPO (Initial Public Offering) using your UPI ID.

The Securities & Exchange Board of India (SEBI) has made the UPI route mandatory for retail investors applying through registered brokers, DPs (depository participants) and RTAs (registrar and transfer agents). The process has now become a lot simpler and straightforward.

Earlier, IPO applications were made via your bank using ASBA (Application Supported by Blocked Amount) where you’d have to submit a physical application for an IPO through your bank’s net banking portal or by visiting a bank. Once you submitted your application, the required amount would then be blocked by the bank, and debited from your account once your shares were allotted.

The process to Apply for IPO through UPI ID

To apply for an IPO using UPI ID, you have to follow the steps given below:

  • Download and install any UPI 2.0 enabled app like Paytm, Google Pay, etc.
  • Generate your UPI ID and a mobile pin for the bank account that is linked to your trading or Demat account.
  • Login to your stockbroking app or website, and navigate to the IPO menu.
  • Check the essential information about an IPO, like its opening and closing date, lot size, red draft herring prospectus etc.
  • Now, enter your UPI ID (the one that is linked with your Demat account) and determine the number of lots you want to bid for.
  • If you are looking to place a certain bid at the desired price, then enter that price in the input field.
  • Read all the agreements carefully, and then submit your application for the IPO.
  • After submitting successfully, you will receive a request in your UPI app to pay the required amount.
  • After you’ve accepted this request, the number of lots you have subscribed for will be blocked.
  • If your bid is successful, your shares will be allotted to you. The required amount will be debited from your bank account, while the shares will be credited to your Demat account.
  • If your shares are not allotted to you, the blocked amount will be released back to you on the date of share allotment.

Sub-components of IPO

An IPO can be categorized as

  • A fresh issue of shares;
  • An offer for sale;
  • Or a combination of both.

In the case of a fresh issue of shares, a company issues new shares for purposes like economies of scale, payment of debt etc. The funds collected by this issue of shares goes directly to the company.

On the other hand, an offer for sale takes place when existing shareholders offload their current stake in the company and the proceeds from the sale of these shares go to the shareholder. Here, the company does not receive any part of the funds sold.

Since the Securities and Exchange Board of India has made it mandatory for all IPOs to be supported by UPI 2.0, applying for IPOs has become a much quicker, simpler and paperless process today. All one needs is the bid price, the quantity and their UPI ID. With this feature, any person from anywhere in the country can invest in public offerings, contributing their bit in strengthening the economy.

Frequently Asked Questions Expand All

Once you have logged into your stockbroking website or app, you can navigate to the IPO section of the website or app. After determining the bid price and quantity for the IPO, you can enter the UPI ID linked to your Demat account and submit your application. You will then receive a request on your UPI app to pay the required amount which will then be blocked till your shares have been allotted to you.

Yes, you can use your UPI ID to apply for an IPO. SEBI has now made it mandatory for IPOs to be supported by UPI 2.0.

When applying for an IPO, you have to enter the UPI ID (that is linked to your Demat account). After setting your bid price and quantity for the IPO, you will receive a request for the required amount on your UPI app. After approving this payment from your UPI app, the amount will then be blocked until your shares are allotted to you.

The UPI IPO Mandate is a request on your smartphone’s UPI app to block the fund for an IPO that you have applied for. Steps to accept UPI IPO Mandate are as follows:

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