faq-upi

FAQ – Using UPI ID for bidding in IPO

1. What is UPI?

UPI ID (also called Virtual Payment Address or VPA) is a unique ID. The customer needs to create a unique payment ID by adding his bank account details in order to send and accept money via UPI. Ex: Once the customer enters your UPI ID and sends the money, it will be directly credited into beneficiary’s bank account.

2. Do I need to create a new UPI ID for applying in IPO?

No. The existing UPI ID can be used, provided that:

3. How “UPI as a payment option” can be used in the IPO process”? UPI as part of bidding

Investor will fill in the bid details in the application form as per the existing process along with his UPI id.

UPI as part of blocking

  • The Sponsor Bank will initiate a mandate request on the investor i.e. request the investor to authorize blocking of funds equivalent to applicant amount and subsequent debit of funds in case of allotment.
  • The request raised by the Sponsor Bank, would be electronically received by the investor as SMS/intimation on his / her bank provided mobile no. linked to UPI ID.
  • Upon validation of block request by the investor, the said information would be electronically received by the investors’ bank, where the funds, equivalent to application amount, would get blocked in investors account. Intimation regarding confirmation of such block of funds in investors account would also be received by the investor.

UPI as part of payment for shares post allocation process

  • The registrar to the issue, based on information of bidding and blocking received from stock exchange, would undertake reconciliation and prepare the basis of allotment.
  • Upon approval of such basis the instructions would be sent to sponsor bank to credit funds in the public issue escrow account and unblock the excess money in the investors account.
  • Based on authorization given by investor using UPI at the time of blocking, the funds would be debited from investors account.

4. Is use of UPI, as a payment mechanism in IPO, mandatory?

The applicability of UPI as a payment mechanism has been prescribed in a Phased manner as under: Phase I: From January 01, 2019, the UPI mechanism for retail individual investors through intermediaries will be made effective along with the existing process and existing timeline of T+6 days. The same will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later. Phase II: Thereafter, for applications by retail individual investors through intermediaries, the existing process of physical movement of forms from intermediaries to Self-Certified Syndicate Banks (SCSBs) for blocking of funds will be discontinued and only the UPI mechanism with existing timeline of T+6 days will continue, for a period of 3 months or floating of 5 main board public issues, whichever is later. Phase III: Subsequently, final reduced timeline will be made effective using the UPI mechanism.

5. Up to what limit can I apply for an IPO in UPI?

The limit for IPO application is 2 Lakhs per transaction on UPI.

6. How is IPO application using UPI different from IPO application using ASBA submitted with intermediaries?

IPO 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 (Banks/ Third Party Apps). The UPI ID can be used for blocking of funds and making payment in the IPO process. You can accept the request for the amount you have bid by entering your UPI PIN. The money shall be earmarked for settlement once the allocation process is completed and shall be automatically remitted to the Escrow Bank. UPI in IPO process shall essentially bring in comfort, ease of use and reduce the listing time for IPO.

7. Can I apply for an IPO through my UPI Application?

No, the option to apply for an IPO from UPI Application is presently not available.

8. How many IPO’s can I apply from one UPI ID?

There is no restriction for you from UPI on the number of applications using the same UPI ID.

9. What if I do not want to proceed with the IPO application after submission with intermediary? Can I withdraw my bid? If yes, how?

Retail individual investors can withdraw bids till issue closure date. During the bidding period you can approach the same intermediary to which you had submitted the application form for withdrawal.

10. Will I be notified when the bid is successfully placed?

Yes, once the bid details are uploaded on the stock exchange platform, the stock exchange shall send an SMS to you regarding submission of your application, on end of day basis. For the last day of bidding, the SMS may be sent out the next working day.

11. What if I input wrong UPI PIN while authorising the request from IPO?

The transaction will be declined with ‘Wrong UPI PIN’ and you will have to re-initiate the transaction. The transaction can be re-initiated by approaching the the same intermediary to which you had submitted the application form.

12. What if there is an inadvertent error while entering the UPI ID?

The transaction will not get initiated or may get initiated to wrong UPI ID. And needs to be re-initiated as a new request post the correct UPI ID is registered.

13. Till what time shall my money be blocked in IPO?

The Money will be blocked till the finalization of allotment, post which the amount equivalent to allotted shares would be debited and balance amount (in case of partial allotment) will be unblocked.

14. What if my amount is blocked twice for a single IPO request?

You can raise a complaint with the bank/s with the respective Unique Mandate Number provided for the Mandate.

15. Where can I check the status of an active IPO mandate on my UPI App?

The status of the active IPO mandate can be viewed in the Mandate section of your UPI app.

16. Can I use the same UPI PIN for accepting the IPO mandate / block request?

Yes, the same UPI PIN can be used to accept an IPO mandate / block request.

17. Do I need UPI PIN for revoking an IPO block / mandate request?

Yes, you will need the UPI PIN to revoke the Mandate

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