IPO Flurry: Some Investors Miss Out On Bajaj Housing Finance Issue Due To Missed UPI Mandates; Check

With a flurry of Initial Public Offerings (IPOs) being launched across various sectors, investors are experiencing a virtual buffet of opportunities. However, the excitement surrounding recent IPOs has been met with growing concerns about technical glitches, particularly with UPI payment mandates as companies like Baazar Style Retail, PN Gadgil Jewellers, and Bajaj Housing Finance wrap up their IPOs.

Notably, August saw a record 17 entities filing their Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), marking the highest number of filings in a month in over a year. The IPO frenzy is far from over, but amidst this boom, investors are increasingly voicing their frustrations over UPI mandate-related issues, sparking widespread discussions on social media.

UPI Mandate Glitches

Social media platform X (formerly known as Twitter) has become a hotbed of investor complaints about UPI mandates during the Bajaj Housing Finance IPO. Many investors claimed that they applied for the IPO but never received payment mandates to complete their transactions. Others reported that while the amount for the bid was blocked, their banking apps did not reflect any update.

RK, the founder of IPO Mantra, took to X to address these concerns, stating that he received a flood of complaints on the last day of the Bajaj Housing Finance IPO. According to him, many investors who applied through UPI experienced the same issue-no mandates were generated, resulting in their applications being rejected.

"All those applications are rejected," he wrote in a tweet. "I had previously advised investors to opt for Internet banking instead of UPI, given the scale of the problem."

The complaints didn't stop there. Some investors pointed fingers at platforms like Zerodha and GPay, claiming they faced issues when using these intermediaries. Zerodha responded promptly, clarifying that it acts as an intermediary and has no control over the mandate generation process. Meanwhile, users reported widespread failures in the banks' Automated System for Banking Applications (ASBA) during the peak of the Bajaj Housing Finance IPO, leading to a slew of rejections and frustrations.

Amit Sethi, another investor, highlighted the scale of the issue by pointing out that Axis Bank's ASBA facility was down, and other banks experienced similar failures. He tweeted, "After the Bajaj Housing Finance IPO, it's clear that banks are not ready to handle payment mandates at this large scale. Several investors reported delayed UPI mandates, and ASBA systems by some banks simply stopped working."

These technical issues have drawn attention to the ability of banks to handle the sheer volume of transactions during high-demand IPOs. Parth Shah, another aggrieved investor, claimed that his bid status turned to "rejected" even before the cut-off date, adding to the confusion. Responding to Shah's query, the National Payments Corporation of India (NPCI) recommended that investors seek assistance from their respective banks to resolve such issues.

For those looking to apply for upcoming IPOs via UPI, it's essential to understand the steps involved, especially considering the recent wave of technical difficulties:

Enter your bid details and your UPI ID while applying for the IPO.
You will receive a block mandate request on your UPI app.
Upon receiving the request, input your UPI PIN to approve the transaction.

Once your mandate is approved, three outcomes are possible:

Full Allotment: If you are allotted all the shares you bid for, the blocked amount will be debited from your account.
Partial Allotment: If only a portion of your bid is approved, some shares will be allocated to you, and the unallocated funds will be unblocked.
No Allotment: If no shares are allotted, the funds will remain blocked until the mandate's expiry date, after which the blocked funds will be released back to your account.

As the IPO market heats up, investors should prepare for both opportunities and potential obstacles. While the convenience of UPI has made IPO applications more accessible, the recurring issues with payment mandates indicate a need for improvements in the system. Many experts suggest that opting for Internet banking over UPI could mitigate these problems, but this may not always be a feasible solution for all investors.

In the coming months, the demand for IPOs is only expected to grow, with more companies lining up to go public. As such, banks and payment systems need to ensure their platforms are robust enough to handle large volumes of transactions, or else investor dissatisfaction will continue to rise.