UPI mandate creation for IPOs drops 62% in October with fewer public offers

The 1.14 million mandates created in October were the lowest on the platform since NPCI started making the data public

Mandate creation through Unified Payments Interface (UPI) for initial public offerings (IPO) fell sharply in October as fewer companies launched their public floats.

Data released by the National Payments Corporation of India (NPCI) shows 1.14 million mandates were created through UPI for IPOs in October, down 62.3 per cent compared to last month. In volume terms, this is the lowest the platform has seen since NPCI started making the data public.

In October, only a single IPO closed that of Aditya Birla Sun Life AMC. IPOs of FSN E-Commerce Ventures, or Nykaa, which saw bumper listings, and Fino Payments Bank opened in October but closed in November. September had seen five companies list on the bourses, mopping up Rs 6,887 crore while in August, eight IPOs cumulatively raised Rs 17,841 crore, the most since November 2017.

In September, around 3.03 million mandates got created through UPI for IPOs, while August saw 5.86 million mandates being created. July saw a record number of mandates created through UPI on the back of blockbuster IPO of food delivery firm Zomato. The IPOs of GR Infraprojects, Clean Science, and Tatva Chintan also saw huge success. Almost 2 million mandates were created through UPI for IPOs in June.

Mandate creation is when a customer blocks an amount in the bank account for an IPO application.

When it comes to mandate execution -- transactions where an investor gets allotment of shares, in October, 320,199 or 28 per cent of all the mandates created through UPI got executed. September saw 13 per cent of all the mandates got executed while August saw over 22 per cent mandates getting executed.

Country’s largest lender State Bank of India (SBI) received the maximum mandate creation requests of 276,773 in October, followed by HDFC Bank with 196,811, and ICICI Bank with 134,200 requests.

When it comes to the rate of decline of UPI IPO mandates at banks, there was a considerable improvement in the past few months, especially after NPCI started publishing the monthly data on its website. However, in October, the decline rates seem to have gone up.

SBI saw an approval rate of 85.69 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 78.56 per cent, 88.35 per cent, 88.21 per cent, 86.97 per cent, respectively.

Although October was a damper as far as new companies debuting on the bourses are concerned, November already has seen eight IPOs, which includes the likes of PB Fintech and One97 Communications.