The Securities and Exchange Board of India (SEBI) has made a major change in a rule related to Initial Public Offering (IPO). SEBI said individual investors applying for IPO of equity shares and convertible papers can make payments up to Rs 5 lakh through Unified Payment Interface (UPI).
Along with this, these investors have also been asked to provide UPI ID in the bid and application form. This has to be done by syndicate members, share brokers, depository participants and registrars of any IPO and through the share transfer agent submitted.
SEBI said in a circular that the new guidelines will be applicable for IPOs opened on or after May 1, 2022. The decision was taken after the National Payment Corporation of India (NPCI) reviewed the convenience of processing applications with the increased UPI limit. NPCI had increased this limit from Rs 2 lakh to Rs 5 lakh in December 2021.
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Several IPOs coming up: This new rule is coming at a time when IPOs of many big companies including LIC are about to be launched. It is estimated that LIC’s IPO will open for retail investors in the month of May. LIC is considered to be the biggest IPO in the country.