Applying for IPO has been made easy for more than a year now using the UPI mode of payment. The method is very simple when compared to the earlier methods of applying via your bank that is by using ASBA (Application Supported by Blocked Amount) from one's bank's net banking portal or by visiting a bank to submit the physical application for an IPO (initial public offering).
SEBI has made the UPI route mandatory for retail investors who wish to apply through registered brokers, DPs (depository participants) and RTAs (registrar and transfer agents).
Similar to the ASBA method, the money is blocked by your bank until the shares have been allotted after applying for the IPO.
Which banks/apps support IPO applications using UPI?
Earlier, the facility was only supported on the BHIM app, but more additions have now been made. You can check the list on NPCI's website here.
Here is the how the process looks like if your broker is Zerodha and you use the Google Pay app with your UPI account linked to HDFC Bank.
Register for UPI on Google Pay
Download Google Pay on your smartphone and make sure that your HDFC bank account is linked to the app.
Google Pay will have created a UPI account with "okhdfcbank" as the handle. This is your UPI ID. Make a note of it for entering your online IPO application. Also, note that the account you are applying through is your personal account as an application gets rejected if the person applying is different from the person whose bank account is used to fund the bid.
Apply for IPO on Console
- Login into https://console.zerodha.com/
- From the tab options on the upper side of the webpage, click on "Portfolio". And from the drop-down options choose "IPO."
- The page will list all the IPOs that are currently open for bidding. Click on "Bid" against the issue to choose to bid on.
- In the next page enter your UPI ID and choose "@okhdfcbank" as the handle. Then click on "Verify."
- Once verified, select "individual investor" as the type of investor.
- Enter the number of shares and price you wish to bid on. Make sure your bid is at least the size of one lot (minimum quantity of shares to bid on) and the price you bid on falls within the issue price band. The "amount payable" calculated on the page will be amount blocked by your bank after you accept the mandate.
- Read the prospectus on the IPO provided and tick the declaration on the window provided.
- Click on "Submit".
- On clicking "Submit", you will receive a mandate request on your UPI app. Make sure to accept this mandate within the timeframe provided. In some cases, it could take a few hours to receive the mandate.
How to accept an IPO mandate on Google Pay?
- Open Google Pay.
- Go to your profile.
- Tap on "Settings".
- Tap on "One-Time Mandates."
- Tap on "Action Required" on the mandate and enter PIN.
- You should receive an SMS from HDFC Bank notifying successful creation of the mandate.
Things to note
- By accepting the mandate, you are authorising the bank to block the required funds for the application until the allotment is completed. If you receive shares on allotment, the money is debited from your account to the company and shares are credited to your Demat. If shares are not allotted to you, the blocked funds will be released on the end date or expiry date of the mandate.
- At the end of the day, you will receive an SMS from the stock exchange confirming the receipt of your application.
- You can return to Console and check the status of your bid till the stock is listed. You can also modify the bid, that is you can bid for more shares or change the price to place the bid on. You will receive another mandate for the same. Make sure to accept the mandate.