Retail investors can now bid up to Rs 5 lakh in the initial public offering using UPI. The Securities and Exchange Board of India (SEBI) on Tuesday raised the Unified Payment Interface (UPI) limit for IPOs by retail investors from Rs 2 lakh to Rs 5 lakh. SEBI said that this would be applicable to public issues arising on or after May 1, 2022.
The regulator has also asked investors to submit their UPI ID in the bid-cum-application form, which is submitted to the brokers, or depository participant, or registrar. “All individual investors applying for a public issue where the application amount is up to Rs 5 lakh, shall use UPI and shall also provide their UPI ID in the submitted bid-cum-application form,” SEBI said in a circular.
The move comes after the National Payments Corporation of India (NPCI) decided in December 2021 to increase the limit for UPI based application backed by blocked amount (ASBA) in IPO from Rs 2 lakh to Rs 5 lakh. As per the SEBI circular, NPCI has reviewed the systemic readiness required in various intermediaries to facilitate the processing of applications with enhanced UPI limits, and confirmed that as on March 30, 2022, more than 80% of the intermediaries have registered with NPCI. provisions have been complied with.
Back in 2018, the market regulator had allowed UPI payments as a payment option for submitting bids in public issues, primarily to create better efficiency and reduce the listing time of IPOs to three days. “The proposed process will enhance efficiency, eliminate the need for manual intervention at various stages, and reduce the time period from issue closure to listing to 3 working days,” Sebi had said in a 2018 circular.