The Securities and Exchange Board of India (SEBI) has proposed allowing investors to use the unified payments interface (UPI) while bidding for shares in an initial public offer (IPO) to reduce the public issue timeline from the current T+6 to T+3.
In a discussion paper released on Wednesday, the capital market regulator said that while ASBA — application supported by blocked amount — helped in reducing the timeline two years back, UPI could help in further bringing down the overall IPO timeline.
“In view of the significant developments in the payment mechanisms, it is felt that the unified payments interface (UPI)... could be incorporated with ASBA mechanism to further improve the efficiency of the (IPO) process,” stated the paper.
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T+3 refers to a system wherein the equity shares would be listed on the bourses on the third day from the day the IPO closes for subscription. SEBI had reduced the IPO timeline from T+12 to T+6 in January 2016 by making ASBA mandatory for all investors.
SEBI, however, said since UPI had a cap of ₹2 lakh for money transfer, institutional investors and high net worth individuals would be allowed to bid using the existing ASBA process.