IPO Refunds and Fund Unblocking: What Happens If You Are Not Allotted

If you apply for an IPO and don't receive shares — or receive fewer than you applied for — the money that was blocked in your bank account is released. Because the money was only blocked, never paid, this is called unblocking rather than a refund, though both words are used. This guide explains when it should happen and what to do if it doesn't.

Why there is usually no “refund”

With ASBA and UPI applications, the application amount stays in your account and is marked as blocked. After allotment:

• Not allotted: the full blocked amount is released.
• Partly allotted: only the value of the allotted shares at the final issue price is debited; the rest is released.
• Allotted in full: the amount for the shares at the final price is debited. If you bid at cut-off and the final price was below the cap, the difference is released.

You may have earned interest on the blocked amount while it sat in your savings account, since it never left.

When it should happen

Under SEBI's T+3 timeline, the unblocking of funds is due on T+2 — two working days after the issue closes. Each IPO's schedule lists this as the “refund” or “initiation of refunds” date; our IPO pages show it in the timeline.

How to check

• UPI: your UPI app shows the mandate status changing from “active/blocked” to “revoked” or “completed”.
• Net banking: the hold or lien on your account disappears and your available balance goes back up.
• First confirm your allotment status: how to check allotment status.

If funds are still blocked

1. Wait until the end of T+2. Banks process releases in batches through the day.
2. Check allotment status with the registrar. If you were allotted, the blocked amount will be debited instead.
3. Contact your bank (for UPI, the bank linked to the UPI ID; for ASBA, your SCSB) with the IPO name, application number and date.
4. Contact the registrar named in the RHP; its investor-grievance contact details are in the offer document.
5. Escalate through SEBI's online complaints system, SCORES, if the bank or registrar does not resolve it.

SEBI has set out compensation that the bank or intermediary responsible must pay investors for delays in unblocking beyond the prescribed timeline; the current terms are in the RHP's section on investor grievances and in SEBI's circulars.

Money blocked across several IPOs

Each application blocks its own amount, so applying to several IPOs at the same time can tie up a large sum until each one's T+2. Plan for the full amount being unavailable during that window.

If the issue is withdrawn or fails

If an IPO is withdrawn, postponed or does not achieve minimum subscription, no shares are allotted and all blocked amounts are released. The company announces this through the exchanges.

Related: How IPO allotment works