IPO Application Cancellation Process Explained

Published on Saturday, September 25, 2021 by Chittorgarh.com Team | Modified on Tuesday, November 16, 2021

A retail investor who applied in the retail category (less than Rs 2 lakhs) can cancel or modify the IPO application any time while the IPO subscription window is open. An IPO application cannot be withdrawn once the IPO closes for the subscription. Certain banks or brokers limit the time on the issue closing day (i.e. up to 2 PM) to cancel or revise IPO bids.

High net-worth individuals (HNIs) investing in the Non-Institutional Investors (NII) category cannot cancel their IPO applications. They can only revise (only increase the bidding price) their IPO application before the IPO subscription window closes.

Note:

• The stock exchange’s IPO bidding window is open from 10 AM to 5 PM on working days. The IPO application cancellation request made when the exchange bidding window is closed (5 PM to 10 AM) are processed by the exchange at morning 10 AM the next day.
• Most banks do not permit to modify or cancel till 5 PM on the issue closing day. The limit the time to 2 or 3 PM.
• It may take up to 24 hours after the cancellation request to get the funds unlocked.
• A retail investor can also reapply in the IPO after successfully cancelling the request by the exchange.

Note: Please read the IPO prospectus document for detailed IPO application cancellation/modification rules.

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HNI IPO Application Cancellation

An HNI IPO application cannot be cancelled. It can be revised but only to increase the price. That’s the reason most HNI’s apply in the last hour of issue closing. Retail individual, HUF and NRI bids for over 2 lakhs in the NII category are considered are not subject to cancellation.

Alternate?

1. Every IPO application stays with the broker or bank for some time before they are submitted to the exchange IPO bidding system. Brokers allow you to cancel the bids while it’s not submitted to the exchange. It’s rare and very short duration.
2. An investor can make the HNI bid application get rejected for the allotment process by submitting an additional bid in retail in the name of the same person. As per the rule, in case a duplicate application is found, both applications get rejected.

Note:

• The funds get released only after the allotment process is complete and your applications are marked as rejected.
• Both the bid must reach exchange and you get a confirmed application number.
• Try to place both the bids from different brokers/banks as validation on broker/bank side may reject the bid before it reaches the exchange.

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IPO Cancellation Process

The IPO application cancellation process depends on the route used for an IPO application. Investors generally apply in IPO using two ways:

1. IPO ASBA Application
2. IPO UPI Application

Steps to cancel ASBA IPO Application

1. Log in to the net banking website or mobile app from where you applied for the IPO.
2. Go to the IPO section and open Order Book.
3. Click on the transaction ID of executed IPO application.
4. Click on the ‘Withdraw Application/Cancel Bid/Delete Bid’ button once available.
5. Confirm the transaction.

Steps to cancel UPI IPO Application

1. Login to the broker’s IPO application or mobile app from where you applied in IPO.
2. Go to the IPO section.
3. Select the IPO bid that needs to be cancelled.
4. Click on the ‘Modify Bid/Delete Bid/Delete Order/Withdraw Application’ button once available.
5. Confirm the transaction.
6. Revoke/Reject the UPI mandate. Note: Some banks release/unblock the funds after the mandate expiry. Hence, check with your bank/broker if manual revocation is required to release the funds after cancellation.

The broker submits the cancellation request to the Exchange between 10 AM to 5 PM. The broker updates the cancellation request status as soon it gets confirmation from the Exchange.

You will get a notification email once the application gets canceled.

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IPO Cancellation charges

There are no charges levied by any bank or broker for the cancellation of an IPO application. You do not have to pay any fees to cancel an IPO bid either through ASBA or UPI.

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IPO Cancellation Timings

The exchange IPO bidding window is open from 10 AM to 5 PM. You can cancel an IPO anytime online while the IPO is open for subscription. The Cancel/Withdraw option is visible only once the IPO application is successfully submitted. If you do not see the cancel option online, contact the bank or broker through whom you would have applied for the IPO.

However, note that not all banks allow to apply, modify, or cancel till 5 PM on the last day of the issue. Each bank has its cut-offs generally till 2 PM or 3 PM. Click here to know the details of Online ASBA IPO last day timings.

Some brokers like Zerodha also have a specific window to cancel an IPO bid. Zerodha allows IPO cancellation only from 12 PM to 4.30 PM while an IPO is open for subscription.

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IPO Cancellation Limitations

• Only retail investors are allowed to cancel the IPO bids.
• QIBs and NIIs can neither withdraw, cancel nor lower the size of their Bids at any stage.
• The Cancel/modify option is not available online until the broker submits the IPO application to exchange and get a confirmation.
• Each broker may have a specific IPO cancellation window like Zerodha. Check with your broker for the same.
• Though the IPO bidding time on exchange is from 10 AM to 5 PM, the IPO cancellation on the last day is not permitted beyond 2 PM or 3 PM by banks.

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IPO Cancellation Refund

The refund timelines of IPO money on cancellation of IPO application differs from bank to bank. Some banks unblock the application money in a day or two, while some other banks may take more time.

If you have applied using UPI, you may need to revoke or reject the UPI mandate for the funds to get released failing which the funds would be blocked till the UPI mandate expiry date. Check with your bank for the process.

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Modify IPO Bid

A retail investor can revise the IPO application at any time while the IPO is open for subscription. The stock exchanges IPO bidding platform permits revision of IPO application until 5 PM on issue closing day but, each bank has their time limits to accept the modification request on the last day.

The NII (HNI) and QIB investors can also modify their bids but cannot lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage.

Retail Individual Bidders and Eligible Employees Bidding in the Employee Reservation Portion can revise their Bids during the Offer Period and withdraw their Bids until Offer Closing Date.

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IPO cancellation Zerodha

Zerodha allows applying online in IPO using UPI. You can also cancel your IPO application in Zerodha through Zerodha Console while the IPO window. However, the cancellation is permitted only between 12 pm to 4.30 pm.

Steps to cancel IPO application in Zerodha:

You can either delete a bid or an entire IPO application as desired.

1. Login to Zerodha Console.
2. Click on the Portfolio tab.
3. Select IPO from the dropdown.
4. Click on Modify Bid for the desired applied IPO under the Ongoing IPO section.
5. To delete a bid: Select the bid to be deleted. Click on Delete.
   To delete the entire application: Click on the Delete Order button on the right corner.

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Conclusion

A retail investor can cancel an IPO application easily applied using ASBA or UPI through their bank or broker. Check with your bank/broker for the specific process and timings for cancellation.