What is an IPO?
Before we discuss the “How to Apply IPO through UPI?“, let me briefly touch upon the “What is an IPO?“.
An IPO means is an Initial Public Offering. It is when a company first time offers shares of stocks to the public.
In an IPO is, the owners of the company give up part of their ownership to stockholders.
This is the time when a private company decides to proceed public and get listed in the stock exchanges. It’s also known as “going public”.
Let’s discuss in deep, You need the amount to meet your various needs.
Same like us, businesses need the amount to meet various needs.
An IPO is one of the avenues available to them to raise capital.
The important line is this: Money is the bloodline of any business.
Now is the time to get and set afoot in the real world of IPOs.
In this article, we learn about how to actually be a part of an IPO process and how to apply IPO in various ways?
There are two ways of applying for an IPO:
- Through a trading account (Zerodha/Upstox etc.) using the UPI.
Trading account enables you to buy and sell securities on the stock market. You need to have a trading account to trade in IPO shares.
- Through a bank account (SBI/HDFC etc.).
You can also apply for an IPO through your bank account.
Read: How to Apply for IPO and FPO in SBI Bank (ASBA)?
How to Apply IPO through UPI?
UPI stands for Unified Payment Interface.
The National Payments Corporation of India (NPCI) has developed UPI under-regulated by the RBI.
It is an instant payment system on the mobile platform.
It provides inter-bank transfers between any two individual bank accounts.
That means, sending or receiving the amount in real-time among banks in India.
UPI is also allowed blocking amounts for special purposes like IPO applications.
Here is how you can set up a UPI ID using any UPI app for first-time users.
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UPI Registration and PIN Generation
- Download the BHIM app or Google Pay or any other UPI app from the App Store or Google Play Store and install the app.
- Select the preferred language from the list.
- Choose the SIM card which has the mobile number registered with respective bank account and send a SMS to a virtual number for the device binding.
- Select your bank account information and create your virtual payment address.
- In case of multiple Bank Accounts linked to the same Mobile number.
So you should select the Primary Account – through which he will make IPO Application.
- On successful creation of VPA you can set your application PIN (4 digit).
- UPI Id will be 9********0@UPI (user’s mobile no.@UPI so if mobile no. is 9090XYZ099 – UPI id will be 9090XYZ099@UPI).
- Once the application PIN has been set you will get registered for the UPI App.
- You have to mention the above UPI Id onto IPO Application.
Here is “How You Open a Trading Account” (first-time user).
How to Open a Trading Account?
Step 1: Identify where to get the trading account
Select a reliable broker that charges reasonable fees/rates and provides timely service.
Step 2: Submit your trading account application
The Brokerage firm will provide you with an account opening form and a KYC (Know-Your-Customer) form.
Fill in the forms with the correct information and share the KYC documents like proofs of identity and address.
Step 3: Complete the verification
The brokerage firm will contact you for verification.
Thereafter, the firm will hand you the details of your new trading account. You are now set to make your first IPO investment.
Here’s how you can do it.
Applying for an IPO Through any Trading Account
Step 1 Log in and make a choice:
Start by logging into your trading account.
You must now select the IPO bid option that you would like to invest in.
Step 2 Place your order:
Specify the number of shares you want via the trading account.
Case 1 – Fixed-Price IPO, the price of each share issued is already decided.
Case 2 – Book-Building IPO, you will have to select the price from the given price band.
Step 3 Enter your UPI ID and click on the ‘verify’ button:
Make sure your UPI ID is mapped to your bank account.
As per RBI guidelines, The IPO application is liable to get rejected if the individual who is applying is different from the one whose bank account is used to apply.
Step 3 Enter your UPI ID and click on ‘verify’:
you will get a mandate request on your UPI app.
It may take some for you to receive this mandate in some cases since this system is still in the initial stages of operation.
Accept the mandate and you’re done.
Step 3: Verification:
The stock exchange will now verify the details of your IPO order.
That includes the price of the shares, the availability of a sufficient number of shares, and other relevant information.
If all checks out, the exchange will confirm your order.
Step 4 Allotment:
If you receive an allotment, the money is debited from your bank account and shares are credited to your account.
Let’s take one example, with the Zerodha trading account.
How to Apply IPO through Zerodha?
You can apply for an IPO through Zerodha using any UPI app.
You install the current version of the BHIM UPI app and register your UPI ID.
Now you should follow the below steps to apply for IPOs.
- Login to Zerodha App and select “IPO’ in the ‘Portfolio” menu.
- Next, select the IPO you want to apply for from the list of open issues.
- Enter your Unified Payment Interface (UPI ID) and checked to confirm its validity.
- You should make sure this ID is mapped to your personal bank account. Select the investor type for your application.
- If you want to apply at the cut off price, You can check in the checkbox next to ‘Cutoff-price’.
- Click on the checkbox to confirm that you have read all terms and conditions and click on submit.
- Accept mandate request on your UPI App.
At the end of the day, you will receive an SMS from the exchange confirming your application.
If you are looking to apply for IPO using Google Pay as a payment option.
All you need to do is tell your broker or brokerage firm to use your G-Pay UPI ID when he submits the IPO application.
Once you submit your bid for the IPO, a request will be sent to your Google Pay app to approve the payment request.
Read on to know how to find the mandate on Google Pay.
How to Apply IPO through Google Pay?
- You can find the mandate by navigating to your Profile -> Settings then One-time Mandates.
- Select the profile option on the top-right corner in the home screen.
- Click on Settings options.
- Select One-time Mandates and accept the mandate request by proceeding to enter your UPI PIN to validate your application.
You can verify your IPO application details by checking your registered email ID.
Read on to know How to Apply IPO through UPI BHIM app also.
How to Apply IPO through BHIM App?
If you are looking to apply for IPO using BHIM as a payment option.
Read on to know how to find the mandate on BHIM App.
- You can find the mandate by selecting IPO.
- You will be able to see all your ‘Pending’ mandates.
- Accept the mandate request by proceeding to enter your UPI PIN to validate your IPO application.
Source – BHIM & Zerodha