What Happens If IPO Is Not Allotted?
If you do not receive allotment in an IPO (which is common for oversubscribed IPOs), the amount blocked in your bank account under ASBA is released back to you within one to two business days after allotment is finalised. There is no penalty, charge, or loss of any kind for an unsuccessful application. Your bank account returns to its normal state with the previously blocked amount available for use.
Step-by-Step Process After Non-Allotment
- IPO subscription closes on Day T.
- Allotment is finalised by T+6; basis of allotment published.
- Your application is processed in the computerised lottery.
- If not selected: the registrar initiates ASBA block release instructions to your bank.
- Your bank unblocks the amount within 1-2 business days of receiving the instruction.
- Your full application amount is again freely available in your bank account.
Will You Lose Any Money for a Failed Application?
No. Under the ASBA mechanism, your money was never debited; it was merely blocked. No processing fees, application charges, or GST is deducted for unallotted applications. The entire amount is returned without any deduction. This is one of the key benefits of the ASBA/UPI mechanism introduced by SEBI in India.
How to Check If You Were Not Allotted
- Check allotment status on BSE website, registrar website (KFintech or Link Intime), or your broker app.
- You will receive an SMS and email from the registrar confirming non-allotment.
- Your demat account will not show any new IPO shares credited.
Options After Not Getting Allotment
| Option | Description |
|---|---|
| Buy from secondary market on listing day | Buy shares on NSE/BSE after listing if you still want exposure; may be at a premium |
| Wait for a better entry point | Post-listing price may correct in weeks or months |
| Invest in other opportunities | Redirect capital to other stocks or upcoming IPOs |
Buying on Listing Day After Non-Allotment
If you wanted the shares and did not get allotment, you can buy from the secondary market on listing day. However, if the stock lists at a significant premium, you will be buying at a higher price than the issue price. This is a higher-cost entry and requires you to evaluate whether the stock is still fairly valued at the listing price before buying.
Key Takeaway
Not getting IPO allotment is completely normal, especially for oversubscribed offerings, and results in zero financial loss. Your blocked funds return within 1-2 days. Applying to multiple IPOs and from multiple family accounts helps increase overall allotment success over time. Use the Lemonn app to identify the best IPO opportunities and plan your applications strategically.
