Retail investors can now use UPI to place bids up to Rs 5 lakh in initial public offerings. The Securities and Exchange Board of India (Sebi) on Tuesday revised the limits for Unified Payment Interface (UPI) in IPOs by retail investors from Rs 2 lakh to Rs 5 lakh. This will be applicable for public issues coming on or after May 1, 2022, Sebi said.
The regulator has also asked investors to submit their UPI ID in the bid-cum-application form, submitted with the brokers, or depository participant, or registrar to the issue. “All Individual investors applying in public issues where the application amount is upto Rs 5 lakhs shall use UPI and shall also provide their UPI ID in the bid-cum-application form submitted,” said Sebi a circular.
The move comes following the decision of National Payments Corporation of India (NPCI) in December 2021, to enhace limit from Rs 2 lakh to Rs 5 lakh for UPI based application supported by blocked amount (ASBA) in IPOs. According to the Sebi circular, NPCI has reviewed the systemic readiness required at various intermediaries to facilitate the processing of applications with increased UPI limit, and confirmed that as on March 30, 2022, more than 80% of intermediaries have complied with the NPCI provisions.
Back in 2018, the market regulator had allowed UPI payments as an payment alternative for submitting bids in public issues, mainly to create better efficiency and reduce the listing time of an IPO to three days. “The proposed process would increase efficiency, eliminate the need for manual intervention at various stages, and will reduce the time duration from issue closure to listing by up to 3 working days,” Sebi had said in a circular in 2018.
