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IPO Application Methods - Apply IPO through UPI ID

5paisa Research Team

Last Updated: 12 Jan, 2022 02:23 PM IST

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Introduction

Indian investors have said goodbye to the times when IPO application was a cumbersome and document-intensive process. Fast forward to today, and you can wheeze past the IPO application process within seconds, thanks to IPO application with UPI ID. The following sections answer the common questions investors ask while investing in an IPO through the UPI ID. 

What is UPI?

UPI or United Payments Interface is a mechanism that facilitates instant payment. The system has been developed by the National Payments Corporation of India (NPCI). NPCI is a joint venture of the Reserve Bank of India (RBI) and Indian Banks' Association (IBA) that oversees India's retail digital payments and settlement systems. You can transfer money from one bank account to another bank account using a UPI ID within seconds. Unlike RTGS and NEFT, UPI-based payments, also known as IMPS or Immediate Payment Service, are available 24 x 7 x 365. Hence, you can open your UPI ID to transfer money or purchase anything 24 hours a day. 

What is IPO Application Through UPI ID?

In India, investors can invest in an IPO in two ways - directly through their net-banking account or through a broker. The second route is much simpler and more convenient than the first route. However, when an investor routes their IPO application through a registered broker, Depository Participant (DP), or Registrar & Transfer Agent (RTA), they need to do it through UPI.  
When you apply for an IPO through UPI, the application amount is blocked in your account until the allotment date. If you have got the allotment, the money gets deducted from your account, and the shares get transferred to your Demat account. However, if you do not get the IPO allotment, the blocked money is released by the bank, and you may use it any way you want. 
It is wise to note that you do not need a Demat account for submitting an IPO application. But, if you get the IPO allotment, the shares will be transferred to your Demat account. Hence, although not mandatory, it is advisable to open a Demat account before applying for an IPO. 

What are the Benefits of IPO Application Through UPI ID?

The following are the reasons why investors prefer applying for an IPO through UPI ID:
•    Saves Time - It only takes a few seconds to apply for an IPO through UPI ID. Hence, you can save the time otherwise lost on applying through net banking. 
•    Transparent - IPO application through UPI ID is transparent and seamless. You can enter the number of lots and bid price and hit the submit button.  
•    Instant Mandate Creation - When you apply for an IPO through UPI, the mandate is created instantly. You can simply accept the mandate request, and your bid gets placed. 
•    Customer Support - If you face any problems during the application process or face issues as 'money got deducted but receipt not generated,' you may instantly contact the Third-Party Application Provider (TPAP) or Payment Service Provider (PSP). If your problem is not resolved, you may approach the Banking Ombudsman or the Ombudsman for Digital Complaints.  
•    The Money Earns Interest - Since the IPO application amount does not get deducted until the allotment date, your funds continue earning interest until the allotment date (if not more).

How to Apply For an IPO Through UPI ID - ID Creation

You need to create your UPI before applying for an IPO through UPI ID. Follow these steps to create a UPI ID conveniently:
1.    Download an authorised app operated by Third-Party Application Providers (TPAPs) from Google Playstore or Apple App Store. Presently, there are 20 TPAPs in India, including Google Pay, Amazon Pay, Mi Pay, Mobikwik, Jupiter Money, and the likes.
2.    Enter your registered mobile number. If you have not registered your number with your bank account, do it before opening a UPI ID. 
3.    Set a four-digit password to log in to your account.
4.    Select the bank in which you maintain your account. In case your number is linked to more than one bank account, select the one you wish to use for UPI registration.
5.    Enter the last six digits of your bank-provided debit card and the card's expiry date. 
6.    Find the one-time password in your phone's 'Message' folder and enter it in the appropriate box. You will also need to enter your ATM pin for verification. 
7.    After entering the details correctly, the UPI app will ask you to set a UPI Pin for future transactions. Once that is done, your UPI ID gets ready, and you can use it for IPO application.

How to Apply For an IPO Through The Broker's Mobile App or Website

To apply for an IPO through the broker's mobile app, you need to follow the steps listed below:
1.    Download the broker's online trading app and create an account. If you have not already opened a Demat account, the app will guide you to open one. Alternatively, you may open the broker's website to apply online.  
2.    Once your account is created, you need to log in to your account and visit the financial products segment. 
3.    Select 'IPO' to see the available IPOs and select an Open Issue.
4.    Enter the bid price, lots, and UPI ID and hit 'Apply.'    
5.    Enter the UPI Pin on the TPAP to authorise the transaction. 
6.    Your application gets submitted and an application ID is generated. 

5paisa Welcomes You Aboard

5paisa is one of the most convenient destinations for checking upcoming IPOs and investing in the best ones. All you need to do is create an account and invest within seconds. Welcome aboard a new era of IPO investing where convenience juxtaposes high returns. 
 

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