IPO Refund Timeline

The IPO refund and allotment timeline is a regulated process under SEBI's ICDR Regulations 2018, which mandate specific deadlines for each step from IPO closure to listing. The overall timeline is often summarised as T+6, where T is the last date of subscription (the IPO closing date) and listing must occur within 6 working days.

Under the Application Supported by Blocked Amount (ASBA) mechanism — which became mandatory for all categories of IPO applicants — the application money is not transferred from the investor's bank account to the company at the time of application. Instead, the bank blocks the requisite amount in the applicant's bank account. The amount remains in the account (earning any applicable interest) and is only debited upon allotment. For unsuccessful applicants (those not allotted shares in the lottery or proportionate allotment), the block is released — 'unblocked' — and the full amount becomes freely available. This release typically occurs within T+4 to T+5 working days.

The UPI-based IPO application mechanism (introduced by SEBI from 2019, mandatory from January 2022 for retail investors) integrated the ASBA mandate collection into the UPI payment flow. When a retail investor applies via a broker's app or a bank's net banking using UPI, the UPI mandate is sent to the investor's UPI app for approval. Once approved, the amount is blocked in the investor's bank account. Upon non-allotment, the mandate is released and the funds are instantly available.

The T+6 listing requirement was a significant improvement from the earlier T+12 timeline that prevailed before SEBI's reforms. For investors who were not allotted shares, the improvement meant that their capital was tied up for a much shorter period, reducing the opportunity cost of applying to multiple IPOs simultaneously. This timeline reduction was operationally significant for the banking system as well, since large oversubscribed IPOs involved tens of millions of applications and billions of rupees of blocked funds.

In the event that SEBI grants an extension (for reasons such as regulatory issues, court orders, or technical problems), the exchange is required to publicly disclose the reason for delay. Companies and registrars that failed to meet the T+6 deadline without adequate justification were subject to regulatory scrutiny and potential penalties. SEBI also introduced a mandatory interest payment obligation: if the allotment or unblocking of funds is delayed beyond the stipulated timeline due to the issuer's fault, the issuer must pay interest at a specified rate to affected applicants for the period of delay.