SEBI Announces upto ₹5 Lakh Limit for IPO Applications via UPI

SEBI on 5th April 2022 announced that individual investors can use UPI for applying in IPOs, public issues of equity shares, and convertibles of up to ₹5 lakhs. For using this, they need to give their UPI ID in the bid-cum-application form with syndicate member, stock broker, depository participant, registrar to an issue, and share transfer agent.

These new policies will come into effect from 1st May 2022 for IPOs and public issues. The reason for this rule is the popularity of UPI in IPO application processes. NPCI reviewed this policy after which it has come into effect.

As of 30th March 2022, most of the Self-Certified Syndicate Banks, Sponsor Banks, and UPI Apps have increased the transaction limit to ₹5 lakh.

Earlier in Dec 2021, NPCI increased the limit from ₹2 lakh to ₹5 lakh for UPI Apps on IPOs with blocked amount for ASBAs.

Some of the popular UPI Apps that have complied with this new rule include:

• Google Pay

• BHIM UPI

• PhonePe

• HDFC Securities

• ICICI Direct

It will be interesting to see how investors react to this. Mid and Big individual investors will definitely benefit from this move by SEBI.