Understanding UPI-Based IPO Applications
The UPI (Unified Payments Interface) method has revolutionized IPO applications in India, making the process quick and accessible from your smartphone. Combined with ASBA, it provides a seamless experience for retail investors.
What is ASBA?
ASBA stands for "Applications Supported by Blocked Amount." It's a mechanism where:
- Your bank blocks the application amount instead of debiting it
- Money remains in your account and earns interest
- Amount is only debited upon successful allotment
- Block is released if you don't get allotment
UPI + ASBA: How They Work Together
When you apply for an IPO through UPI:
- You enter your UPI ID while applying
- A mandate request is sent to your UPI app
- You approve the mandate with your UPI PIN
- Your bank blocks the amount under ASBA
- After allotment, appropriate action is taken (debit or release)
Step-by-Step UPI Application Process
Step 1: Prepare Your UPI ID
Ensure you have an active UPI ID linked to your bank account. Popular UPI apps include:
- Google Pay
- PhonePe
- Paytm
- BHIM
- Bank-specific apps (like HDFC PayZapp, iMobile)
Step 2: Apply Through Broker/Platform
Open your trading app and navigate to the IPO section. Fill in:
- Number of lots/shares
- Bid price (select "Cut-off" recommended)
- Your UPI ID
Step 3: Submit Application
Review all details carefully before submitting. Once submitted:
- You'll receive a confirmation with application number
- A mandate request is sent to your UPI app
- Status shows "Pending" until mandate is approved
Step 4: Approve UPI Mandate
This is the most critical step:
- Open your UPI app
- Navigate to "Mandates" or "Auto-pay" section
- Find the pending IPO mandate
- Review the details (amount, IPO name)
- Enter your UPI PIN to approve
Step 5: Confirmation
After mandate approval:
- Your bank blocks the amount
- Application status changes to "Submitted" or "Approved"
- You'll receive SMS/email confirmation
Understanding UPI Mandate
What is a UPI Mandate?
A UPI mandate is an authorization you give to block/debit a specific amount from your bank account. For IPOs:
- It's a one-time authorization for that specific IPO
- Valid only for the IPO application amount
- Automatically expires after the IPO process completes
Mandate Validity Period
You must approve the mandate within:
- 24 hours of application, OR
- 5 PM on IPO closing day (whichever is earlier)
Finding Mandates in Different Apps
| UPI App | Where to Find Mandates |
|---|---|
| Google Pay | Menu → Manage → Mandates |
| PhonePe | My Money → UPI Lite/Mandates |
| Paytm | Profile → Settings → Autopay |
| BHIM | Menu → Mandates |
Common Issues and Solutions
Issue 1: Mandate Not Received
Possible Causes:
- Wrong UPI ID entered
- UPI app not updated
- Network issues during submission
Solutions:
- Wait for 10-15 minutes and check again
- Refresh/restart your UPI app
- Contact your broker if mandate doesn't appear
- Modify application with correct UPI ID
Issue 2: Mandate Approval Failed
Possible Causes:
- Insufficient balance
- Bank server issues
- UPI daily limit exceeded
Solutions:
- Ensure sufficient balance for the full amount
- Try again after some time
- Check your UPI transaction limits
- Contact your bank if issues persist
Issue 3: Application Shows Pending
If status remains "Pending":
- Mandate may not be approved yet
- Check UPI app for pending mandates
- Ensure you completed the approval process
- Check SMS for any error notifications
Issue 4: Multiple Mandate Requests
If you see multiple mandates:
- Only approve the one matching your intended application
- Reject/decline duplicate mandates
- You can only have one application per PAN
UPI Transaction Limits
Be aware of UPI limits that may affect IPO applications:
| Bank | Typical UPI Limit |
|---|---|
| HDFC | ₹1 lakh/day |
| ICICI | ₹1 lakh/day |
| SBI | ₹1 lakh/day |
| Axis | ₹1 lakh/day |
For applications above your UPI limit, use net banking ASBA instead.
Tracking Your Application
After successful mandate approval:
- Check broker app for application status
- Note down application number
- Verify amount is blocked in your bank statement
- Wait for allotment date (usually T+3 days after IPO closes)
Canceling UPI-Based Applications
To cancel your application:
- Go to your broker's IPO section
- Find your application
- Select "Cancel" or "Withdraw"
- The UPI mandate will be automatically canceled
- Blocked amount will be released
Note: Cancellation is only possible until the IPO closes.
Best Practices
- Apply Early: Don't wait for the last day to avoid technical issues
- Keep UPI App Updated: Outdated apps may have mandate issues
- Maintain Sufficient Balance: Keep the full amount ready before applying
- Set Reminders: For mandate approval if you can't do it immediately
- Double-Check UPI ID: Even small typos cause failures
- Use Primary Bank Account: Linked to your demat for smoother process
Conclusion
The UPI-ASBA combination has made IPO applications incredibly convenient for retail investors. The key to success is ensuring your mandate is approved within the deadline. By understanding the process and common issues, you can navigate IPO applications smoothly and focus on selecting the right opportunities for your portfolio.