What happens to your money if you don’t get IPO allotment? Nothing leaves your account. The bid amount was only blocked, not debited, and the block is lifted by T+2, the second working day after the issue closes.
Blocked, Not Debited
The reason your money is safe lies in how IPO payments are set up.
- Every public issue bid uses ASBA, short for Application Supported by Blocked Amount
- Your bank places a hold, called a lien, on the bid amount in your own account
- The money stays in your account and goes to the issuer only for shares actually allotted
- With UPI, the hold is created when you approve the mandate in your UPI app
- So there’s no refund to chase, only a hold to release
The Timeline
The release is tied to SEBI’s T+3 schedule, and it’s quick.
- T: the issue closes at 5 pm
- T+1: the registrar finalises allotment, usually by evening
- T+2: debit and unblock instructions go out. For allotted amounts, the fund transfer is done before 2 pm, and the unblocking for non-allotted amounts is completed before 4 pm
- T+3: the stock lists
- Offer documents often quote an outer limit of four working days, so you may see both figures, but T+2 is the scheduled day
What You’ll See
The release shows up in a few places, usually on the same day.
- Banks are required to send SMS alerts for the mandate to block and for the unblock
- Your UPI app or bank statement shows the lien lifted
- The balance becomes available again, and you can use it for anything
- If you were allotted shares, the debit appears and the shares land in your demat account
Does Blocked Money Earn Interest?
This is a small bonus most applicants never notice.
- Money blocked under ASBA stays in your bank account, so it keeps earning your account’s interest while it’s blocked
- You just can’t spend it during that window
- SEBI’s investor site is cited as saying no refund is needed if shares aren’t allotted, and the blocked amount continues to earn interest
If You’re Partly Allotted
Some applicants get fewer shares than they bid for, especially in the NII category.
- Only the amount for the shares you actually received is debited
- The rest of the blocked amount is released on the same T+2 schedule
- The difference shows up as a debit smaller than the amount you blocked
If the IPO Is Cancelled or Withdrawn
A smaller set of cases involves the issue itself failing.
- If an IPO doesn’t get enough subscription, for example below 90% of the issue, it can’t proceed and all application money must be released
- Under the QIB route, an issue where QIB subscription falls below 75% is cancelled with a full refund
- SEBI has flagged failure to unblock funds after an IPO is cancelled or withdrawn as a known problem, so check the release if this happens
When the Unblock Is Late
If your money isn’t released on time, you’re entitled to compensation, and there’s a standard process.
- Under SEBI’s rules, the bank pays the higher of ₹100 a day or 15% a year on the application amount for delayed unblocking of non-allotted or partly allotted applications
- Sources differ on when the clock starts. An August 2023 SEBI circular computes compensation from T+3, while earlier guidance used an earlier date, so rely on the current rule
- Intermediaries also owe compensation when they fail to resolve a complaint about unblocking
- The same compensation applies if a bank blocks multiple amounts for one application or blocks more than the application amount
How to Escalate
Move in steps, starting with the cheapest.
- Raise an unblock request through your bank’s net banking ASBA section or your UPI app
- Email the registrar’s grievance officer with your PAN and application number
- If it’s still unreleased after about a business day, lodge a complaint on SEBI’s SCORES portal, selecting the registrar or bank category and mentioning the number of days delayed
- Keep screenshots of the mandate, the SMS alerts and your bank statement as proof
What It Means in Practice
A few habits make the wait easier.
- Don’t count on the blocked money for other expenses until it’s released
- Don’t assume you lost money just because the funds show as unavailable
- Check your bank statement on T+2 and make a note if nothing has moved
FAQs
Q1. Is my money gone if I don’t get IPO shares?
No. It was only blocked in your own account, so nothing has to be refunded. The block is lifted, usually by T+2.
Q2. How long does the unblock take?
It’s scheduled for T+2, with unblocking done before 4 pm. Offer documents often cite four working days as the outer limit.
Q3. Do I earn interest while my money is blocked?
Yes. The money stays in your bank account, so it keeps earning the account’s interest, though you can’t use it.
Q4. What if the bank doesn’t unblock my money on time?
You can claim the higher of ₹100 a day or 15% a year on the application amount. Raise it with the bank and registrar first, then SEBI’s SCORES portal.
