The Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity. UPI is built over the IMPS (Immediate Payment Service) infrastructure and allows you to instantly transfer money between any two parties bank accounts.

The Securities Exchange Board of India (SEBI) has permitted the use of the UPI identification number for application to public issues. An individual’s UPI identification number or ID can be used as a payment option for making application to such IPO Issues. This particular process will significantly reduce the time consumed in the IPO application process.

Only retail individual investors are allowed to use UPI for payment in public issues. Qualified Institutional Buyers and High Net-worth Individuals shall continue to apply as per the existing process

The application form for an IPO, now also includes a field for entering your UPI ID as a payment mechanism. Further, you can get in touch with any of the Intermediary who shall be able to guide you on the process in detail.

Step by Step Process :

Step 1 : Register for UPI on Google Pay app & link your Bank Account

Step 2 : Enter your UPI ID on the IPO application form and submit it

Step 3 : Login to the stock broker’s app and go to the IPO menu

Step 4 : Choose the IPO of your choice from the ones open for subscription

Step 5 : Check the details of the IPO like opening and closing dates, issue size, lot size and read the documents carefully

Step 6 : Provide the UPI id of the bank account linked to your trading and demat account

Step 7: Specify the number of lots you want to bid and submut

Step 8 : You will get a fund block request on Google Pay app

Step 9 : Approve the request in the Google Pay App to block the amount for the IPO

Step 10 : The funds will be blocked in your bank account until allotment, when it is debited. The limit for IPO application is Rs 2 lakh per transaction on UPI.

Step 11 : On allotment of the shares, the money will be automatically debited from this blocked amount.

Step 7 : If the shares have not been allotted to you, the blocked funds will be unblocked on the end date or expiry date of the mandate.

What is a UPI ID?

UPI ID (also called Virtual Payment Address or VPA) is a unique ID for using UPI. The UPI Id can be created by registering with one of the UPI enabled mobile applications (App) using your bank account details

From when, use UPI as a payment option in public issues, has been made available?

UPI as a payment mechanism is available for all public issues for which Red Herring Prospectus is filed after January 01, 2019.

How is public issue application using UPI different from public issue application using ASBA submitted with intermediaries?

Public issue application using UPI is a step towards digitizing the offline processes involved in the application process by moving the same online. This requires you to have to create a UPI ID and PIN using any of the UPI enabled mobile application. The UPI ID can be used for blocking of funds and making payment in the public issue process.

You can accept the request to block the funds for the amount you have bid by entering your UPI PIN in the mobile application. The money shall be blocked and shall be automatically remitted to the Escrow Bank, in case of allotment. UPI in public issue process shall essentially bring in comfort, ease of use and reduce the listing time for public issues.

Can I use my existing UPI ID for applying in public issues?

Yes. The existing UPI ID can be used, provided that:

The bank account associated with the UPI ID is held with a bank whose name is appearing in the ‘List of SCSBs eligible to act as an Issuer Bank’ available on website of SEBI at;

You are using a mobile application and a UPI handle that supports use of UPI for public issues. A list of such applications and handles is appearing in the ‘List of SCSBs eligible to act as an Issuer Bank’ available on website of SEBI;

The total length of the UPI ID does not exceed 45 characters (e.g. the UPI ID -XYZ@UPI is 7 characters)