National Payments Corporation of India (NPCI) announced it is taking up the first initial public offering (IPO) through Unified Payments Interface (UPI) based ASBA for retail investors applying through brokers, DPs and RTAs. SEBI has introduced ASBA, or Applications Supported by Blocked Amount, under which an IPO applicant’s account does not get debited until shares are allotted to them. UPI is now mandatory in ASBA for retail investors. The phase wise implementation of UPI as a payment option started on 1 January 2019 and the platform was made available to retail investors but the existing process of submitting physical applications from intermediaries to banks also continued. In the second phase, which began on 1 July, UPI payment for IPO has been made mandatory for retail investors applying through brokers, DPs and RTAs. The existing timeline of T+6 days post issue closure will continue till the final phase is implemented. Praveena Rai, COO, NPCI, said the new process will increase efficiency, eliminate the need for manual intervention and logistics at various stages. The UPI 2.0 mandate feature of one time blocking shall ensure that the amount remains blocked (and not debited) in the customer’s account till allotment is done, as currently happening in the ASBA process, she added. In the final stage, NPCI expects to reduce the gap between IPO closing and listing to 3 days.
