Indian investors have bid farewell to the days when filing an initial public offering (IPO) was a time-consuming and document-intensive process. Apply IPO with a UPI ID is very simple. Today, thanks to the IPO application with UPI ID, you can breeze through the IPO application process in seconds. The sections that follow answer the most common questions investors have while using the UPI ID to invest in an IPO.
What exactly is UPI?
The United Payments Interface, or UPI, is a system for making immediate payments. The National Payments Corporation of India designed the system (NPCI). The Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) have formed a joint venture to supervise India’s retail digital payments and settlement systems, known as NPCI. Within seconds, you can transfer money from one bank account to another using a UPI ID. UPI-based payments, also known as IMPS or Immediate Payment Service, are available 24 hours a day, seven days a week, 365 days a year, unlike RTGS and NEFT. As a result, you can use your UPI ID to send money or make purchases at any time.
IPO Application through a UPI ID
Investors in India have two options for investing in an IPO: directly through their net-banking account or through a broker. The second path is far more straightforward and convenient than the first. When an investor submits an IPO application through a registered broker, Depository Participant (DP), or Registrar & Transfer Agent (RTA), UPI is required.
The application amount is blocked in your account until the allotment date when you apply for an IPO through UPI. If you’ve received an allotment, the funds will be withdrawn from your account and the shares will be transferred to your Demat account. If you do not receive an IPO allotment, however, the bank will release the frozen funds, which you may use in any way you like.
It’s important to understand that you don’t need a Demat account to apply for an IPO. The shares will be sent to your Demat account if you receive an IPO allotment. As a result, while it is not required, it is recommended that you register a Demat account before applying for an IPO.
How to Apply for an IPO Using a UPI ID – ID Creation
Before applying for an IPO using UPI ID, you must first construct your UPI. To create a UPI ID quickly, follow these steps:
- From the Google Playstore or Apple App Store, download an authorised app managed by Third-Party Application Providers (TPAPs). In India, there are currently 20 TPAPs, such as Google Pay, Amazon Pay, Mi Pay, Mobikwik, Jupiter Money, and others.
- Enter the phone number associated with your account. Before you open a UPI ID, make sure you’ve registered your phone number with your bank.
- To log in to your account, create a four-digit password.
- Choose the bank where you want to keep your account. If you have more than one bank account associated to your phone number, choose the one you want to use for UPI registration.
- Enter the last six numbers of your debit card issued by your bank, as well as the card’s expiration date.
- Locate the one-time password in the ‘Messages’ folder on your phone and enter it in the appropriate field. For verification, you’ll also need to enter your ATM pin.
- After accurately entering the information, the UPI app will prompt you to create a UPI Pin for future transactions. Your UPI ID will be ready after that, and you can use it to apply for an IPO.
How to Apply for an Initial Public Offering (IPO) Using a Broker’s Mobile App or Website
You must follow the procedures below to apply for an IPO using the broker’s mobile app:
- Sign up for an account using the broker’s online trading app. If you don’t already have a Demat account, the app will walk you through the process. You can also apply online by visiting the broker’s website.
- After you’ve created your account, log in and go to the financial products section.
- Go to ‘IPO’ and choose an Open Issue from the list of available IPOs.
- Click ‘Apply’ after entering the bid price, lots, and UPI ID.
- Authorize the transaction by entering the UPI Pin on the TPAP.
- Your application is submitted, and a unique ID is assigned to it.
What Are the Advantages of Filing an IPO Using a UPI ID?
The following are some of the benefits of applying for an IPO using a UPI ID:
- Saves Time – Applying for an IPO using UPI ID simply takes a few seconds. As a result, you can save time that would otherwise be spent applying for a loan through online banking.
- Transparent – Using a UPI ID to apply for an IPO is simple and straightforward. You can then hit the submit button after entering the number of lots and the bid price.
- Instant Mandate Creation – When you use UPI to apply for an IPO, the mandate is created immediately. Simply accept the mandate request, and your proposal will be sent.
- Customer Support – If you run into any troubles throughout the application process, such as “money was deducted but no receipt was generated,” you can contact the Third-Party Application Provider (TPAP) or Payment Service Provider right away (PSP). If your issue is not resolved, you can contact the Banking Ombudsman or the Digital Complaints Ombudsman.
- Interest is Earned – Because the IPO application fee is not deducted until the allotment date, your funds continue to earn interest until that day (if not more).
SEBI established the ability to invest in IPOs using a UPI ID in 2019. UPI has become an indispensable alternative for a variety of reasons due to its quick payment transmission and simple interface.
The method of subscribing to IPO via UPI is simple and convenient, making it accessible to all applicants. They only require a smartphone and a trustworthy UPI app.
SEBI, on the other hand, has made it mandatory for all applicants seeking to subscribe to an IPO to use UPI. As a result, including UPI in the IPO has enhanced public offers.