SEBI revises UPI payment limit for individual investors in IPOs

The new rules will come into effect from May 1, 2022

The new rules will come into effect from May 1, 2022
The new rules will come into effect from May 1, 2022

SEBI raises investment limit via UPI to Rs.5 lakh for individual investors

The Securities and Exchange Board of India (SEBI) has revised upwards the size of bids that retail investors can submit in an initial public offer (IPO) using the Unified Payment Interface (UPI).

The SEBI move comes nearly four months after the National Payments Corporation of India (NPCI) enhanced the per transaction limit in UPI from Rs.2 lakh to Rs.5 lakh for UPI-based Application Supported by Blocked Amount (ASBA) in IPOs.

They have been asked to provide their UPI ID in the bid-cum-application form submitted with any of these entities — syndicate member, stockbroker, depository participant, and registrar to an issue and share transfer agent.

In a circular issued on Tuesday, the capital markets regulator increased the limit from the current Rs.2 lakh to Rs.5 lakh. SEBI said that individual investors applying in public issues of equity shares and convertibles can use a unified payment interface (UPI) for application amount up to Rs.5 lakh.

The SEBI circular stated, “… it has been decided that all Individual Investors applying in public issues where the application amount is up to Rs.5 lakhs shall use UPI and shall also provide their UPI ID in the bid-cum-application form,”

SEBI had enabled the use of UPI to bid for IPOs in November 2018 – a move that came into effect from July 1, 2019. Meanwhile, the SEBI circular highlighted the fact that NPCI has reviewed the systemic readiness for processing the increased UPI limit and confirmed that more than 80 percent of the intermediaries have put in place the required changes.

The increased limit will come into effect for all IPOs that open on or after May 1.

As of March 30, 2022, more than 80 percent of Self Certified Syndicate Banks (SCSBs)/ Sponsor Banks/ UPI Apps have conducted the system changes and have complied with the NPCI provisions.

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