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 on equity delivery, mutual funds and IPOs with m.Stock’s. 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
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FAQ
What is the UPI type in an IPO application?
UPI type in an IPO application refers to the option you need to select when you apply for an IPO through UPI. The goal of this process is to digitise the entire IPO process improving efficiency and reducing listing time for public issues. You can apply online anytime anywhere for an IPO as long as you have a valid UPI ID and access to your broker’s platform.
Can we submit multiple applications in an IPO with the same UPI ID?
No, you cannot submit multiple applications in an IPO with the same UPI ID.
Is UPI allowed for an IPO?
Yes, using UPI to apply for an IPO is allowed. You can conveniently select UPI as the preferred method for payment while applying for an IPO on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Which UPI is best for an IPO?
When it comes to applying for an IPO through UPI, there isn’t a single “best” UPI app. It depends on your personal preferences and the UPI handles supported by different platforms. You can use any of the UPI payment apps such as Google Pay (GPay), BHIM, PhonePe, Paytm, etc.
What is the UPI limit for an IPO?
The limit per transaction on retail individual investor subscriptions is ₹5 lakh through UPI. This implies that you can bid in a single issue up to ₹5 lakh worth of shares using UPI.
Can we apply for an IPO without UPI?
Yes. It is possible to apply for an IPO without UPI. The UPI ID is necessary only if you use the UPI payment mode. If you are making an ASBA (Application Supported by Blocked Amount) application for an IPO, you do not need a UPI ID. In such a case, you only need an account in a bank that offers an ASBA facility.
Can we apply for an IPO through Paytm?
Yes, you can apply for an IPO through Paytm.
Is subscribing to an IPO through UPI fast?
Yes, subscribing to an IPO through UPI is an extremely swift and hassle-free.
Which UPI app can be used for an IPO application?
Several UPI apps can be used for applying to an IPO, including Paytm, PhonePe, and Google Pay.
Can I use Google Pay UPI ID for an IPO application?
Yes, you can use your Google Pay UPI ID for IPO application.