IPO mandates via UPI jump in November amid record fund mobilisation

Mandate creation through the Unified Payments Interface (UPI) for initial public offerings (IPO) jumped in November amid record fund mobilisation.

According to data released by the National Payments Corporation of India (NPCI), the umbrella organisation for retail payments, over 7.6 million mandates were created in November compared with just 1.14 million the preceding month.

A record Rs 36,000 crore was raised through IPOs in November—more than double the previous record made in November 2017. The month saw big-ticket IPOs of Paytm, Policybazaar, and Nykaa.

Despite the record fundraise, mandate creation was lower than in July, when a record 7.66 million UPI IPO mandates were created, on the back of the blockbuster IPO of Zomato and smaller ones that were big draws like Clean Science and GR Infraprojects.

Mandates are created when a customer blocks an amount in the bank account for an IPO application.

In November, the most popular IPO was that of Latent View Analytics. The company’s Rs 600-crore IPO saw bids exceeding Rs 1.1 trillion. October saw only one IPO, that of Aditya Birla Sun Life AMC. In September, five companies had mopped up Rs 6,887 crore, while in August eight IPOs cumulatively raised Rs 17,841 crore. When it comes to mandate execution – transactions where an investor is allotted shares – 1.24 million or 16.3 per cent of all the mandates created in November through UPI got executed. The corresponding figure was 28 per cent in October, 13 per cent in September, and over 22 per cent in August. The country’s largest lender, State Bank of India (SBI), received the maximum mandate creation requests of almost 2 million in October, followed by HDFC Bank with 1.25 million, and ICICI Bank with 889,168 requests.

In terms of the rate of decline of UPI IPO mandates at banks, there was a considerable improvement in the past few months, especially after the NPCI started publishing monthly data on its website. However, in October, the decline rates had risen but they stabilised somewhat in November.

SBI saw an approval rate of 88.39 per cent. Other public sector banks like Bank of Baroda, Bank of India, Punjab National Bank, Canara Bank, and Central Bank reported approval rates of 85.22 per cent, 91.94 per cent, 90.86 per cent, 91.31 per cent, 89.34 per cent, respectively. Large private banks mostly have an approval rate of over 90 per cent.