How to purchase LIC IPO shares using UPI

Synopsis : The UPI method is only available to retail investors, qualified workers, and eligible policyholders. You can use your UPI ID as a payment option to apply for an IPO. All you have to do is tell your broker to use your UPI ID to submit the IPO application.

With LIC IPO fever engulfing the country, many retail investors are looking to get in on the action. Using their Unified Payment Interface (UPI) ID is one of the ways retail investors can bid for shares in the IPO. Only retail investors, eligible workers, and eligible policyholders can use the UPI mechanism, according to the LIC DRHP submitted with SEBI.

You can use your UPI ID as a payment option to apply for an IPO. All you have to do is tell your broker to use your UPI ID to submit the IPO application.

Eligible policyholders bidding in the Policyholder Reservation Portion can use the Applications Supported by Blocked Amount (ASBA) and UPI Mechanism. Before placing bids through the UPI Mechanism, interested retail investors must first authorise the UPI mandate request.
Investors must utilise their own bank account connected to their UPI ID, which must be UPI 2.0 recognised by the National Payments Corporation of India (NPCI).

What is the UPI mechanism and how does it work?

“Bidding using UPI Mechanism should guarantee that contents of the Bid are examined and confirmed by opening the attachment in the UPI Mandate Request and then proceeding to authorise the UPI Mandate Request using his or her UPI PIN,” according to LIC DRHP. A RIB, Eligible Employee, and Eligible Policyholder Bidding through UPI Mechanism shall be deemed to have verified the attachment containing the RIB, Eligible Employee, and Eligible Policyholder Bidding through UPI Mechanism in the UPI Mandate Request and have agreed to block the entire Bid Amount and authorised the Sponsor Banks to issue a request to block the Bid Amount after authorising the mandate using his/her UPI PIN.

The following are the Do’s and Don’ts to follow while bidding for an IPO via UPI, according to the LIC DRHP:

• Do not fill out the Bid Cum Application Form with a third-party bank account or a UPI ID linked to a third-party bank account.
• In the event of Bids filed by RIBs utilising the UPI Mechanism, do not link the UPI ID to a bank account maintained with a bank that is not UPI 2.0 approved by the NPCI.
• If RIBs are bidding through the UPI Mechanism, do not submit more than one Bid cum Application Form for each UPI ID.

• If you are a RIB, Eligible Employee, or Eligible Policyholder bidding using the UPI Mechanism, do not enter erroneous DP ID, Client ID, PAN, or UPI ID data.

• Investors that use the UPI Mechanism should only specify the Bidder’s and the first Bidder’s legitimate UPI IDs (in case of joint account.)

• To apply for the Offer, they must utilise only their own ASBA Account or bank account connected UPI ID, and not the ASBA Account or bank account linked UPI ID of any other person.

How to bid for IPO shares using UPI

Here’s how it works, according to the HDFC Bank website.
Step 1: Fill out the IPO application form using your UPI ID and submit it.
Step 2: On the Google Pay app, you will receive a fund block request.
Step 3: Approve the request to block the amount for the IPO in the Google Pay App.
Step 3: The monies will be held in your bank account until they are allotted, at which point they will be deducted. The maximum amount for an IPO application is Rs 2 lakh per UPI transaction.
Step 4: The money will be automatically deducted from this blocked amount upon the allocation of the shares.

Why should you invest in LIC IPO?

These are some of the main reasons why people might consider investing in this initial public offering –

• The Life Insurance Corporation of India is a well-known brand with a strong market presence and a healthy financial position.

• Investing in LICs may provide major benefits to investors. In the June quarter, the corporation made stock market earnings of almost Rs 10,000 crores. For many, LIC is an attractive investment prospect because of its excellent financial position, large fund size, and government affiliation.

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