Initial Public Offering or IPO is a process through which a privately held company allows the general public to purchase the shares of the firm. The application to apply for an IPO is made available online as well as in assigned banks. While buying shares through IPO, you have to provide your bank details so that the amount for the stocks can be blocked. But this process can take a lot of your time, thus, UPI or Unified Payments Interface has been introduced by the government of India as a payment option for IPOs. But what is UPI and IPO? Let’s take a look at the Unified Payment Interface and Initial Public Offering in detail.
What is UPI?
(UPI) Unified Payment Interface is a platform that integrates numerous payment applications and banking services. The UPI ID of an individual and the PIN is adequate for someone to send and receive money in real-time. This platform was developed in an effort to create a cashless economy. With the help of UPI, you do not have to remember any account numbers or IFSC codes to transfer money. Just a phone number or UPI ID of the receiver is needed and you can carry out an immediate money transfer.
For this payment mode, you need a UPI ID and PIN where the ID is a unique identification code for a bank account number. And the UPI PIN is a method of authorising the payment via UPI and consists of a four-digit code that you can set. You can begin UPI powered payments by downloading apps that support it. Most of these apps ask for your bank account details and registered mobile number. After you enter the OTP sent to your number, you can set your UPI PIN and begin payments.
What is IPO?
An IPO (Initial Public Offering) is a process through which a private company offers its shares or stocks to the public for purchase. Before launching an IPO, the firm is held by its founders or private shareholders and managed by the owners. But with IPO, a part of the ownership is made available to the general public. So, anyone can now bid for the shares and buy the stocks of the company which cannot be controlled by the firm.
There are two goals that can be achieved by launching an IPO. One of them is raising capital for financially assisting the organisation and second is giving back to the investors who had initially funded the company. There are several steps involved in Initial Public Offering like valuating the shares, registering the IPO, making it open to the public, allotting the shares and so on.
Steps to apply for IPO through UPI
Here are steps to help you apply for an IPO via UPI:
- You need to create a UPI ID and link your bank account to it to start payments. This can be with the help of a UPI enabled payment app.
- After you have set up your UPI ID and PIN, you can fill it in the form while filing your IPO bid application.
- Once the IPO application is submitted, it is uploaded along with the bid details and your UPI ID on the stock exchange platform.
- The bank will then request the required funds subsequent to the bid to be blocked from your account. This amount shall be deducted in case you are allotted any shares. A message will be sent to your registered phone number requiring you to approve the request.
- If no shares are allotted to you, then the blocked amount will be unblocked and refunded back to your bank account.
With this, you can use your UPI ID for buying shares through an IPO instead of providing your bank account details. This is a simpler and easier method of payment which can also be useful in your day-to-day activities for payments.