Archive / Investment Adviser (Level 1) / Securities Market Segments

nism-series-xa-upi-asba-retail-investor-bidding-limit[ INVESTMENT ADVISER (LEVEL 1) ]

Under SEBI guidelines, what is the maximum bidding limit for an individual retail investor applying through the 'UPI ASBA' channel in an IPO?

[ A ]Up to ₹1,00,000 (₹1 Lakh).

[ B ]Unlimited bidding using UPI.

[ C ]Up to ₹10 Crore.

[ D ]Up to ₹5,00,000 (₹5 Lakhs) per IPO application using UPI-based block mechanism.[ CORRECT ]

Takeaway

Under the UPI ASBA channel, a retail investor can bid for IPO shares up to a maximum of ₹5,00,000 (₹5 lakh) per application, blocked in their bank account via the UPI mandate mechanism.

Derivation

SEBI and NPCI jointly designed UPI ASBA so retail investor funds remain blocked (not debited) in the applicant's own bank account until allotment, and only the allotted amount is actually deducted, with the rest released automatically. This retail channel is capped at ₹5 lakh per application — beyond that threshold, an applicant is treated as a Non-Institutional Investor (NII/HNI) and must apply through the separate NII route, not the UPI mechanism. The cap was originally lower before NPCI/SEBI raised and standardized it, and the exam tests whether candidates know the current retail ceiling rather than an outdated or unlimited figure.

Why the others fail

A — Up to ₹1,00,000 (₹1 Lakh).

₹1 lakh was an earlier, lower threshold used before SEBI and NPCI expanded and standardized the UPI ASBA retail bidding ceiling to its current, higher level.

B — Unlimited bidding using UPI.

UPI ASBA bidding is not unlimited — it is explicitly capped per application; bids larger than the retail ceiling must go through the separate Non-Institutional Investor route instead.

C — Up to ₹10 Crore.

₹10 crore-scale bids fall under High-Net-Worth Individual (Non-Institutional Investor) applications, a completely separate category from the UPI-based retail ASBA mechanism.