Unified Payments Interface (UPI) has now become one of the most preferred electronic payment modes in our country. The adaptation has been remarkably quick and across segments.
UPI is designed by the National Payments Corporation (NPCL) an entity regulated by the Reserve Bank of India (RBI). It is a system built on the architecture of Immediate Payment Service (IMPS) system that allows the transfer of money between two bank accounts instantaneously i.e., in real-time. UPI finds its application not only in merchant payments but also peer to peer transfers.
Since UPI is a real-time system that allows a bank-to-bank transfer and a mobile phone is enough to do any transactions including investing in shares and stocks. The Securities Exchange Board of India (SEBI) has made it mandatory for retail investors who apply for an Initial Public Offer (IPO) through an intermediary to use the UPI mechanism.
IPO is a new stock issuance by a private company to the public. IPO has many forms or sub-components namely
All the above can now be applied through the UPI mechanism.
Step-1 Download any UPI-enabled bank app or any third-party UPI app from the google play store like Gpay, PhonePay or PayTM, etc.
Step-2 Thereafter select the preferred language, mobile number, and the bank in which you hold an account
Step-3 Create your unique UPI ID
Step-4 Link the unique UPI ID to your bank account (this mobile number must be the same one registered with the bank as the bank will verify it through an SMS)
Step-5 Create an MPIN (mobile banking personal identification number) for authorising transactions made through the UPI
Step-6 After this you would have successfully created the UPI ID
Now, let us understand how to apply for an IPO with the UPI.
Needless to say one needs a demat account and a broking account to apply for an IPO.
Step-1 An IPO applicant has to login through a broker website or broker app to subscribe to an ongoing IPO
Step-2 Select the IPO for application and read Draft Red Herring Prospectus (DRHP) and the details of the IPO carefully before applying. One needs to take note of the following details
Step-3 Fill the IPO application with
Step-4 Hit the submit button. Once the application is submitted the UPI mechanism will begin.
UPI-based IPO application is hassle-free. Gone are the days of physical submission, writing a cheque for an IPO application by using ASBA (Application supported Blocked Amount) forms and their related issues. Now IPO application is an instant, real-time and seamless application. Happy investing.
UPI is an acronym for Unified Payments Interface a mechanism that allows a bank-to-bank transfer via a mobile phone.
Yes. SEBI has made it mandatory for retail investors who apply for an Initial Public Offer (IPO) through an intermediary to use the UPI mechanism
Yes. UPI is a safe method for applying for an IPO. Apart from this, it is also a fast and less cumbersome method for applying for an IPO.
SEBI has in a circular has stated that only one application can be made against one UPI ID.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.
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Please note that by submitting the above mentioned details, you are authorizing TradeSmart to call and email you and also to send promotional communication even though the contact number may be registered under DND.