Published on Friday, January 4, 2019 by Chittorgarh.com Team | Modified on Wednesday, January 14, 2026
UPI means Unified Payments Interface. It is an instant payment system on the mobile platform. It offers inter-bank transfers between any two persons' bank accounts, i.e. sending or receiving money in real-time among banks in India. In addition, UPI also allows blocking money for special purposes like IPO applications.
The National Payments Corporation of India developed UPI. It is regulated by the RBI.
From May 1, 2022, SEBI enhanced the transaction limit to ₹5 Lakh for UPI-based ASBA applications in public issues (including IPOs). Earlier, the limit was ₹2 Lakh.
Important Resources:
UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
To apply for an IPO using the UPI payment mechanism, investors must meet the following requirements. The UPI-based IPO facility is now supported across all major UPI apps and is not restricted to any single application.
After allotment:
SME IPOs: Minimum application is 2 lots, which often exceeds ₹2 lakh.
Mainboard IPOs: Minimum application is 1 lot.
UPI (Unified Payments Interface) is a real-time payment system that allows instant money transfers between bank accounts using a mobile app and a UPI ID. It works through UPI apps such as Google Pay, PhonePe, Paytm, BHIM, and bank apps. UPI uses a UPI ID and PIN, making payments fast, secure, and paperless.
UPI in an IPO allows investors to apply for IPOs by blocking funds in their bank account through a UPI app instead of transferring money upfront. Once you apply for an IPO through a broker, a UPI mandate request is sent to your UPI app for approval.
An IPO UPI mandate is a request sent to the investor’s UPI app to block the application amount in the bank account until IPO allotment is finalised. The amount remains blocked but not debited. It is debited only if shares are allotted otherwise, the block is automatically released.
As per SEBI regulations, only one IPO application per PAN per category is allowed. Even if an investor uses multiple UPI IDs or bank accounts, submitting more than one application with the same PAN can lead to rejection of all applications.
No, there are no charges for making IPO payments through UPI. Banks, UPI apps, and NPCI do not levy any fees for blocking or releasing funds related to IPO applications.
IPO UPI mandate status can be checked in your UPI app under “Mandates” or “Autopay” sections. You can also view the status on your broker’s IPO order page or through bank notifications and SMS alerts.
The Virtual Payment Address or VPA is the most important concept of UPI. It is also known as UPI PIN, UPI Code or UPI ID.
VPA is a unique ID which you create for your bank account. This unique ID can be used for online money transfer across the banks in India similar to IMPS, NEFT, RTGS etc.
UPI VPA look like 'rajivsingh916@icici'.
If someone wants to transfer money to you, you just have to provide this ID. No need to provide the bank account number, IFSC code, name etc.
The limit for IPO application is 5 Lakhs per transaction on UPI.
As per the bank guidelines:
Only minor above the age of 15 with a bank account as a single (not joint) are eligible for UPI.
Minor below the age of 15 years or a minor who is a joint account holder is not eligible for UPI.
Please consult with your bank for more detail.
UPI payment in public issues is permitted only for individual investors, specifically under the Retail Investor and Non-Institutional Investor categories. (up to Rs 5,00,000).
To link your bank account with UPI, download a UPI app, register using your mobile number linked to the bank account, select your bank, and set a UPI PIN using your debit card details. Once linked, the UPI ID can be used for IPO applications.
UPI plays a key role in blocking, debiting, and releasing funds during the IPO process. When you approve the UPI mandate, the application amount is blocked in your bank account and remains blocked until the allotment is finalised.
If you receive a partial allotment, only the amount required for the allotted shares is debited, and the remaining blocked balance is automatically unblocked. If you do not receive any shares, the entire blocked amount is released back to your account, usually on the allotment or refund date as per the IPO timeline.
If an IPO application expires, is withdrawn, or gets rejected, the blocked amount is also unblocked automatically. If you do not have sufficient balance at the time of approving the UPI mandate, the mandate will fail and the IPO application will be considered invalid.
In rare cases where the amount appears blocked twice, one block is usually released automatically. If it does not get released within the expected timeline, you should first contact your bank or UPI app support. For application-related issues such as bid status or rejection, your broker is the right point of contact
If the IPO UPI mandate fails due to timeout, incorrect PIN, or technical issues, the IPO application becomes invalid. No amount is blocked. You must reapply for the IPO and approve the mandate again before the issue closing date.
You can modify or cancel your IPO application through your broker’s IPO section before the issue closes. If modification requires a new amount, a fresh UPI mandate may be sent. Cancellation releases the blocked amount automatically.
When you apply for an IPO using UPI, a single UPI mandate request is sent to your UPI app after you submit the bid through your broker. This mandate generally remains valid until the IPO allotment process is completed, which is usually a few days after the issue closes. You must approve the mandate before the IPO closes, often within the same day or before the cut-off time mentioned by the exchange; otherwise, the application becomes invalid.
During the entire IPO process, you need to enter your UPI PIN only once, at the time of approving the mandate. After successful approval, you receive instant confirmation notifications via your UPI app, SMS, and sometimes email, confirming that your bid has been placed and funds are blocked.
To ensure the mandate request is genuine, always verify that the request shows the correct IPO name, merchant/bank (sponsor bank), and the exact bid amount. Never approve requests from unknown or incorrect details. If anything looks suspicious, reject the mandate and contact your broker immediately.
The UPI mandate generally remains valid until the IPO allotment process is completed. This period usually lasts 3–5 working days after the IPO closes. If shares are allotted, funds are debited otherwise, the blocked amount is released automatically.
Yes, most SEBI-registered brokers allow IPO applications through UPI. The broker facilitates the bidding process, while payment authorisation happens through your UPI app. Once the mandate is approved, your IPO application is considered valid.
To invest in an IPO using UPI, apply through your broker’s platform, select UPI as the payment option, and enter your UPI ID. You will receive a mandate request in your UPI app, which must be approved using your UPI PIN to complete the application.
No, third-party UPI IDs or bank accounts are not allowed. The PAN, demat account, bank account, and UPI ID must belong to the same investor. Using someone else’s UPI ID may lead to rejection of the IPO application.
UPI ASBA is an application process where IPO investments are made using the ASBA (Application Supported by Blocked Amount) method through UPI. The investor’s funds remain blocked in the bank account and earn interest until allotment, ensuring safety and transparency.
