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New IPO Application Process Via UPI: Know All About It
In the IPO application process that became obsolete from Monday i.e. July 29, 2019, you had to make an application for the public offer through the ASBA or application supported by blocked amount on offer by SCSBs or self certified syndicate banks. In the process, while you provide your bank account number and name, from the same the money equivalent to the value of the shares you have applied for get blocked and in case of allotment, get transferred.
But to simplify the application process, the UPI based ASBA is made mandatory for all retail investors who have their bank accounts with bank specified on the SEBI's website.
Interestingly, after the mandate Affle IPO is the first one to go public.
All about the new UPI-based ASBA for IPO application:
In the new process, your form for IPO application will bear two unfilled columns relating to UPI and ASBA. If your bank has the UPI facility, you need to provide in your UPI ID for the payment option. Then after your form is submitted, you will get a request for block mandate which you need to accept and for the same , you will have to furnish your UPI password or PIN.
Hereafter your money will be blocked and once the shares applied for during the application are allotted to you in your demat holding, the amount will be debited from your bank account.
How to activate UPI Id if you don't have a UPI id?
You can still bid for the IPO and here is what you need to do. For the same, your bank account and mobile number should be linked and you should be owing a debit card. And then you can activate your UPI Id within some time.
Advantage of the new UPI based IPO application process:
Here the major advantage comes as allotment is not rejected due to some of the glitches such as signature mismatch etc. Also, the processing time will be reduced drastically as now on the forms will be required to be sent from the bank accepting IPO application to the bank where you have your savings account.
Herein, it is to be noted that verification of the applicant is done through the block mandate request feature which asks for your prior consent to block the amount on your UPI app.
Also, the new process should reduce the time between the listing of shares and IPO closure.
Few more points to make your IPO application process smooth via UPI
Herein you need to be mindful of the merchant ID which has sent you the request for blocking mandate. You need to check for the verified merchant tag.
Though the collection funds request will be given to you on a working day, you will be able to accept the same also on a holiday as UPI works on all days.
And in other discrepancies, such as wrongful rejection of the request or wrong entry made in any of the respect, you will need to approach your intermediary through which you are applying for the IPO.
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