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How to Apply for IPO using UPI?
Initial Public Offering (IPO) is one of the most sought-after investment options in India. In fact, a majority of retail investors open a Demat account with the sole purpose of investing in IPOs. Gone are the days when applying for an IPO involved filling physical forms and standing in queue with your broker or bank to submit your application. With the growth of online share trading, introduction of Application Supported by Blocked Amount (ASBA) and UPI, applying for an IPO has become extremely simple and hassle-free. Let us understand how to apply for IPO using UPI.
What is UPI?
UPI stands for Unified Payments Interface. It is a national payments interface that has made digital payments in India extremely safe and convenient. UPI was spearheaded by National Payments Corporation of India, under a joint leadership between the Reserve Bank of India and the Indian Bank Association. The UPI mechanism is centered around the transfer of money from one bank account to another through a unique ID called the UPI ID. While primarily used to transfer money between bank accounts, UPI is also used in the financial ecosystem, including applying for IPO.
Why is IPO Allotment via UPI Required?
Since the introduction of UPI, it has been the greatest change in how we transact. Life after the launch of UPI has experienced a move towards seamless digital payments, which have brought enormous benefits to IPO allotments as well. Considering those benefits, here’s why you need to apply for an IPO through UPI:
Hassle-Free Transactions:
It replaces other inconvenient methods by allowing instant and hassle-free transactions directly through your mobile phone application.Efficiency & Transparency:
This streamlines the IPO application process, reducing time taken and providing real-time transaction tracking for investors.Cost-Effective & Accessible:
Normally, these transactions are cheaper and available on various mobile apps making it easier for more people to participate in an IPO.
How does IPO Allotment through UPI Work?
When you apply for an IPO using UPI, the exchange sends the bid to the bank via the National Payments Corporation of India (NPCI), and the bank then sends a mandate request to the UPI app. If you approve the UPI mandate, the IPO application is complete.
Once the application is complete, your bank account funds are blocked until allotment. If you get an allotment, blocked funds will be debited from the bank account, while shares will be credited into your Demat account. If shares are assigned, they are deposited into your demat account one or two days before the listing date. In case you don’t get allotted, funds are released back to your bank account.
However, it is important to note that third-party payment is not acceptable for IPO subscriptions via UPI. The UPI ID and Demat account must belong to the same person.
What are the benefits of IPO application through UPI ID?
Convenience
- When you apply for an IPO using UPI, you simply have to enter your UPI ID and OTP. That’s it. Your IPO application is complete. No need to fill and submit cheques and wait for a couple of days for it to clear. With UPI, applying for an IPO happens in minutes.Transparency
- The process of applying for an IPO using UPI is transparent. Once you have selected the number of lots you wish to apply for, you can proceed to the payment and use your UPI ID to complete the application.Interest on the application amount
- Since the application amount does not get deducted from your bank account till the time the shares get allotted to you, you keep earning interest on said amount.How to apply for an IPO through UPI ID?
In order to apply for an IPO using UPI, you must have an active UPI ID. If you don't have one, you can simply create your UPI id by following the below steps:
- Download any of the authorised UPI apps on your mobile phone - PhonePe, Google Pay, Amazon Pay, and Paytm etc
- Start the UPI ID creation process by entering your mobile number linked to your bank account
- Create a login password
- Select the bank account you wish to link the UPI ID to
- Enter the required debit card details and request a One Time Password
- Enter the One Time Password received on your registered mobile number
- Create a UPI Pin for transacting with your newly created UPI ID
- Remember your UPI ID, login password, and UPI Pin. Do not share this information with anyone
- Enter your UPI ID in the payment tab of your IPO application to apply for an IPO using UPI
- Complete the payment by entering your UPI pin
How to apply for an IPO through m.Stock's mobile app or website?
- Visit our website www.mstock.com or download our mobile application
- Open a Demat account with us (if you have not done so already)
- Log in to your Demat account
- Click on IPO section under the menu tab
- Select the IPO you wish to apply for
- Enter the number of shares and your bid price
- Check your IPO application and proceed to the payment tab
- Select the mode of payment as UPI
- Enter your UPI ID and generate OTP
- Enter the OTP and that’s it! Your IPO application process is complete
Now that you know how to apply for an IPO using UPI, you can use this convenient and transparent payment option during your next IPO application. But why just IPOs? You can use the various asset classes at your disposal like equity, mutual funds, currency etc, especially since you can trade for free across products for life with m.Stock’s Zero Brokerage account. So, let the savings and wealth creation begin!
Read Also: How to apply for an IPO online?
Read Also: How to Bid for an IPO – Tips and Tricks
Read Also: Top 10 IPO Investment Tips and Strategies
