The Securities and Exchange Board of India (SEBI) on Tuesday said that individual investors applying for public issue of equity shares and convertible securities can now pay up to Rs 5 lakh through Unified Payment Interface (UPI). That is, individual investors can now invest up to Rs 5 lakh in public issues of equity shares and convertible securities through UPI.
Along with this, these investors have also been asked to provide UPI ID in the bid/application form. Sebi said that investors will have to do so if they submit the form through syndicate members, share brokers, depository participants, registrars of an issue and share transfer agents.
What is convertible security?
The security which can be converted into some other security is called convertible security. Usually, companies issue a number of bonds that investors can later convert into shares. These are called convertible bonds.
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New will be applicable from May 1
Market regulator Sebi said in a circular issued on Tuesday that this rule would be applicable to public issues opened on or after May 1, 2022. Earlier, the National Payment Corporation of India (NPCI), the developer of UPI, reviewed the convenience of processing the application with a limit of Rs 5 lakh and after this the decision was taken.
In order to simplify the process of applying through UPI, NPCI had suggested some changes in the system and by March 30, 2022, about 80 percent of Self-Certified Syndicate Banks/Sponsor Banks/UPI Apps have implemented these provisions.
NPCI had raised the limit for investment in IPO and government bonds through UPI to Rs 5 lakh in December. NPCI said that it has taken this step to encourage the use of UPI among retail investors.
UPI is an instant payment system developed by the National Payment Corporation of India (NPCI). With the help of this, a person can send money to another person’s account instantly.