How to Apply for an IPO Through UPI?

Published on November 01, 2022 | 5 min read

Key Takeaways

You can submit your application online and approve the payment mandate through your UPI app.
The application amount is generally blocked in your bank account until the allotment process is completed.
Third-party bank accounts or UPI IDs can lead to rejection.
Always verify the IPO and amount before entering your UPI PIN.
The required amount should be available in the linked bank account when the mandate is processed.

Applying for an Initial Public Offering (IPO) has become much simpler with UPI. Investors no longer need to deal with forms or set up separate payment methods. They can apply for an IPO online and approve a UPI mandate through their mobile phone.

UPI IPO applications allow the system to block the required amount from the user’s bank account without deducting it immediately. If the shares are allotted, the required amount is deducted; otherwise, the blocked amount is released to the investor. All of this is facilitated by the UPI IPO mechanism run by NPCI.

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What Is a UPI IPO Application?

A UPI IPO application is a way of applying for an issue by using your UPI ID to authorise the blocking of funds in your bank account.

For example, suppose you apply for an IPO worth ₹50,000. After submitting your application, you receive a mandate request on your UPI app. Once you approve it using your UPI PIN, ₹50,000 is blocked in your linked bank account.

The money is not normally transferred immediately. It remains blocked until the allotment process is completed.

How to Apply for an IPO Through UPI?

The process is fairly simple:

Select the IPO

First, choose the IPO you want to apply for through your registered broker or another permitted intermediary. Before applying, read the IPO details, including the price band, lot size, opening and closing dates, and other information in the offer document.

Enter Your Application Details

Log in to your broker's website or mobile app and select the IPO. Enter details such as the number of lots you want to apply for and your UPI ID. The application is then submitted through the intermediary. SEBI allows IPO applications using UPI to be initiated through permitted intermediaries, including registered stock brokers.

Check Your UPI App

After submitting the application, a UPI mandate request should arrive in your UPI app.

Check the details carefully. Make sure the IPO, amount, and other details match your application.

Approve the Mandate

If everything is correct, approve the mandate request by entering your UPI PIN. Once approved, the application amount is blocked in your bank account. NPCI describes this as the key step in the UPI IPO process.

Wait for Allotment

After the IPO closes, the allotment process takes place. If you receive the full allotment, the required amount is debited. In case of partial allotment, the amount required for the allotted shares is debited, and the remaining blocked funds are released.

If there is no allotment, the blocked amount is released according to the applicable mandate process.

Also Read: How to Apply for an IPO Through ASBA?

Important Things to Check Before Applying

Before submitting a UPI IPO application, check that:

Your UPI ID is correctly entered.
Your UPI-linked bank account has sufficient funds.
Your bank and UPI app support IPO mandates.
You are using your own bank account and UPI ID.
Your PAN, demat, and application details are correct.
You approve the mandate before the applicable deadline.
You do not submit duplicate or incorrect applications.

Applying for an IPO through UPI is a convenient digital process. You submit your bid through an eligible intermediary, approve the UPI mandate, and keep sufficient funds available in your bank account. Just remember that a successful IPO application does not guarantee allotment; shares are allotted according to the applicable issue and allotment process.

FAQs

Can I apply for an IPO using UPI?

Yes. Retail individual investors can use the UPI mechanism for eligible public issues through permitted intermediaries, subject to applicable rules.

Is the IPO money deducted immediately after applying?

No. The application amount is generally blocked in your bank account after you approve the UPI mandate. The required amount is debited if shares are allotted.

Can I use someone else's UPI ID for my IPO application?

You should not. SEBI's guidance states that investors should use their own bank account and linked UPI ID. Applications using third-party accounts can be rejected.

What happens if I don't get any IPO shares?

If you receive no allotment, the blocked amount is released according to the mandate and applicable process. You do not have to manually transfer the money back to your account.

What if I don't receive the UPI mandate request?

Check that you entered the correct UPI ID and that your bank and UPI app support IPO applications. Also check your UPI app for pending mandates. If the mandate does not arrive within the required timeline, contact your broker or bank for assistance.

About Author

Sachin Gupta

Senior Sub-Editor

is a seasoned financial writer with over eight years of experience across global markets, including Australia, the UK, and New Zealand. He specialises in simplifying complex financial concepts, making them accessible and engaging for a wide range of readers. When he’s not writing or traveling, he can often be found exploring the mountains, drawing inspiration from the calm and clarity of the outdoors.