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Banks received 19 lakhs plus IPO applications through UPI in June

27 March 20236 mins read by Angel One
Banks received 19 lakhs plus IPO applications through UPI in June
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The Securities and Exchange Board of India approved IPO applications through UPI back in 2019. It was done to reduce the period between closing an IPO and listing security from 6 days to 3 days.

Per data released by NPCI (National Payments Corporation of India), banks have received over 19 lakhs IPO mandates in June created with UPI as a payment option.

Mandate creation is basically a transaction in which a customer creates a block of amount for IPO application in their bank account.

Top banks with largest IPO applications via UPI

Among the top five remitter banks, the State Bank of India secured the top position with 4,86,555 IPO applications. The approval rate through UPI stands at a staggering 84.63% in June 2021.

Four other banks in this list include:

NPCI data further shows, out of the 19 lakh UPI IPO mandates, banks have processed nearly 3.3 lakhs in the previous month.

Therefore, almost 17% of applicants who applied for IPO have been allotted their shares.

In early 2021, Paytm Payments Bank signed a partnership with Paytm Money to allow payments for IPO applications. Moreover, it also got authorisation from SEBI to make @paytm a valid handle for payment of IPO applications.

How will UPI prove helpful for IPO?

The Unified Payment Interface is going to help the IPO process in the following ways:

  • Investors can apply for IPO online through any broker they wish.
  • UPI will reduce the manual intervention usually required at various stages of the IPO process.
  • It will essentially decrease the overall time between issue closure and listing.
  • UPI is going to substantially increase the efficiency of the IPO process by streamlining the amount locking.
  • Akin to the ASBA process, in UPI, your money will stay in your bank account until the allotment.

Easy steps to apply for IPO via BHIM UPI app

If you want to apply for IPO using the UPI method, here’s a step-by-step guide to help you with the process:

  • At first, create a UPI ID for your bank.
  • Now, go to the online IPO application form and provide the necessary bid details.
  • Thereafter, enter your UPI ID and then submit the form.

Once you have completed these steps, your stockbroker is going to upload various details to the stock exchange. Then, it will verify and validate your PAN and Demat account with NSDL/CSDL.

Your UPI ID, along with bid details, will be sent to the IPO merchant banker thereafter. You will then receive a request from the sponsor bank to approve and initiate blocking of funds via UPI app.

After your approval, the amount will be withdrawn from your account.

Final words

As of now, the total number of applications for shares through UPI mode is low. However, experts believe it is only going to rise in the following days. With so many significant IPOs planned this year, investor interest is about to reach a record high as UPI becomes more mainstream.

Want to receive more of such interesting news about the financial world and stock market? You can check out the Angel One blogs.

Frequently Asked Questions

How much can a retail investor invest in IPO through UPI?

Up to Rs. 2 lakhs per transaction

How many applications can you bid for an IPO through a single UPI account?

Only 1 IPO application is allowed through a single UPI account.

Can I use a third-party UPI ID for making payments in IPO?


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