Applies now: Vedant Poly Fabs, allotment out · lists 9 Nov. See 3 more
The short answer
When you apply for an IPO, your money is blocked, not debited. It stays in your bank account but cannot be used.
If you are not allotted, the block is removed. Under SEBI’s T+3 timeline, this must be done by 4 pm on T+2, the second working day after the issue closes. Nothing was taken, so nothing needs to come back. Your usable balance simply goes back up.
Why so many applicants get nothing
In a popular IPO, far more people apply than there are lots to give. Retail winners are picked by lottery, and each winner usually gets one lot.
If the retail portion is subscribed 50 times, most retail applicants get nothing, however many lots they bid for. That is normal and says nothing about your application. Read how IPO shares are allotted for how the draw works.
Your bid can also miss out for other reasons:
- You bid below the final price. A bid at a price under the final issue price gets no shares.
- The UPI mandate was not approved by 5 pm on the closing day.
- The application was rejected, for example for a PAN mismatch or a second application with the same PAN.
What happens to your money: three cases
| Your result | What is debited | What is released | When |
|---|---|---|---|
| Not allotted | Nothing | The full blocked amount | By 4 pm on T+2 |
| Partly allotted | The cost of the allotted shares | The rest | On T+2 |
| Bid at cut-off, final price below the cap | The allotted shares at the final price | The rest, including the price difference | On T+2 |
In every case, the debit and the release happen on the same day, T+2.
A worked example
Bombay Coated and Special Steels has a price band of ₹78 to ₹82 and a lot of 182 shares. It closes on Monday, 2 November 2026, so T+2 is Wednesday, 4 November. Say you bid for 13 lots at cut-off. The amounts are our calculation.
- When you apply, the bank blocks 13 × 182 × ₹82 = ₹1,94,012.
- If you are not allotted, the full ₹1,94,012 is released by 4 pm on 4 November.
- If you get one lot at ₹82, ₹14,924 is debited and ₹1,79,088 is released.
- If you get one lot and the final price were ₹80, ₹14,560 would be debited and ₹1,79,452 released. This last case is illustrative.
Why the money stays blocked until T+2
The bank must hold the full bid amount until allotment is final, because until then nobody knows who has won. The registrar finalises the basis of allotment on T+1 and sends instructions to the banks.
On T+2, the banks act on those instructions together: they debit the amount for allotted shares and remove the block on the rest. That is why even a clear “not allotted” result on the evening of T+1 is followed by the release only on T+2.
Not allotted, or rejected?
Allotment status can show two different results that both mean no shares:
- Not allotted. Your bid was valid but was not picked in the lottery, or it was at a price below the final issue price. This is the common case.
- Rejected. Your bid was invalid, for example because of a PAN mismatch, a second application with the same PAN, or a mandate that was never approved.
Either way, the blocked money is released on T+2. A rejection is worth understanding, so the same thing does not happen next time.
How the release shows up
The way you see it depends on how you applied.
- UPI: the mandate in your UPI app changes to revoked, completed or expired. Some apps send a notification.
- Net banking ASBA: the hold or lien on your account is removed. The amount moves back into your available balance.
- Bank SMS: many banks send a message when a block is removed or a debit is made.
There is usually no “refund” credit, because the money never left your account. If something was debited, the statement shows the debit for the allotted shares only.
If the money is still blocked after T+2
Delays are rare but they happen. Work through these steps in order:
- Check your allotment status on the registrar’s site, or on BSE or NSE. Make sure you were not allotted. Read how to check IPO allotment status.
- Contact your bank, which placed the block. Give the IPO name, the amount and your application number.
- Contact the registrar named on the IPO page and in the RHP if the bank says it has no instruction.
- Raise a complaint on SEBI’s SCORES portal if neither resolves it.
Compensation for late release
SEBI’s rules make the bank or the lead manager pay you if the release is late. The compensation is ₹100 a day or 15% a year on the application amount, whichever is higher, for each day of delay.
For an application of ₹1,94,012, 15% a year is about ₹80 a day, so ₹100 a day applies. These are our calculations. The rule comes from SEBI’s circular of 16 March 2021, for IPOs opening on or after 1 May 2021.
If the release is late, write to your bank first and mention this circular. If the bank does not resolve it, the lead manager named in the RHP is the next contact, and then SCORES.
Planning for the next IPO
Money blocked for one IPO cannot be used for another until it is released, even if you already know you were not allotted. If two IPOs close in the same week, the second application needs its own balance.
An unsuccessful application does not count against you next time. Each IPO’s lottery is separate, and every valid application has the same chance within its category. Bidding for more lots does not usually help in retail, because most winners get one lot.
Common mistakes to avoid
- Looking for a refund credit. The money was blocked, so check your available balance instead.
- Expecting the money on T+1. Allotment is finalised on T+1; the release is on T+2.
- Spending against a blocked amount. It is not available until the block is removed.
- Applying again with the same PAN to “improve the odds”. The extra application is rejected.
- Waiting weeks before complaining. Act soon after T+2 if the money is still blocked.
What to do next
See the dates for open IPOs on the allotment status page, with registrar links. Then read how the UPI mandate works and the investor categories to plan your next application.
Sources: SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140, 9 Aug 2023 (T+3): unblocking of funds to be completed by 4 pm on T+2; SEBI circular SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M, 16 Mar 2021: compensation to investors for delayed unblocking, at the higher of ₹100 a day or 15% a year; Bombay Coated and Special Steels RHP and price band announcement (October 2026), for the worked example.
Frequently asked questions
When will I get my money back if my IPO is not allotted?
By 4 pm on T+2, the second working day after the issue closes. The money was blocked, not debited, so it simply becomes available to spend again.
Why is there no refund credit in my bank account?
Because nothing was debited. The bank only blocked the amount. When the block is removed, your available balance goes back up, and there is no separate credit entry.
What if only some of my lots are allotted?
Only the cost of the allotted shares is debited, on T+2. The rest of the blocked amount is released at the same time.
What if the money is still blocked after T+2?
Check your allotment status, then contact your bank, which holds the block. If it is not resolved, contact the registrar and then raise a complaint on SEBI's SCORES portal.
Is there compensation if my money is released late?
Yes. Under SEBI's circular of 16 March 2021, the bank or lead manager responsible pays ₹100 a day or 15% a year on the application amount, whichever is higher, for the delay.
Do I earn interest while the money is blocked?
Yes, the money stays in your savings account and earns its usual interest. You just cannot spend or transfer it until the block is removed.