How to Cancel an IPO Application: A Step-by-Step Guide

Investing in an Initial Public Offering (IPO) can be an exciting way to become part of a company’s growth journey. However, sometimes plans change, and you may need to cancel your IPO application. Whether it’s due to a change in financial strategy, market conditions, or simply a change of mind, canceling an IPO application in India is straightforward if you know the process. In this comprehensive guide, we’ll walk you through how to cancel an IPO application, explain the key steps, highlight important considerations, and answer common questions to keep you informed. 

What is an IPO and Why Cancel It?

An Initial Public Offering (IPO) is when a company offers its shares to the public for the first time to raise capital. Investors apply for these shares through a process facilitated by banks, brokers, or online platforms. However, there are several reasons you might want to cancel your IPO application:

• Market Volatility: Sudden changes in the stock market can make you rethink your investment.
• Financial Constraints: You may realize you need the funds for other priorities.
• Change in Strategy: New information about the company or market trends may influence your decision.
• Application Errors: Mistakes in the application, such as incorrect details, may require cancellation and reapplication.

Canceling an IPO application in India is allowed during the application window, but the process varies slightly depending on how you applied. Let’s explore the steps to cancel your IPO application seamlessly.

Understanding the IPO Application Process in India

Before diving into cancellation, it’s helpful to understand how IPO applications work in India. Typically, investors apply for an IPO through:

1. ASBA (Application Supported by Blocked Amount): This is the most common method, where funds are blocked in your bank account but not debited until shares are allotted.
2. UPI (Unified Payments Interface): Used for retail investors, where you apply through a broker or app and link your UPI ID for fund blocking.
3. Broker Platforms: Many investors apply via stockbrokers like VENTURA 
4. Bank Portals: Banks like HDFC, ICICI, or SBI allow direct IPO applications through their net banking services.

Each method has a slightly different cancellation process, which we’ll cover in detail. The key is to act before the IPO application window closes, as cancellations are not possible after the share allotment process begins.

Step-by-Step Guide to Cancel an IPO Application

Here’s a clear, step-by-step guide to canceling your IPO application in India. Follow these steps based on your application method to ensure a smooth cancellation.

Step 1: Confirm the Cancellation Window

The first thing to check is whether the IPO application window is still open. In India, IPO applications can only be canceled before the application period ends, which is typically 3-5 working days. Once the window closes, the share allotment process begins, and cancellations are no longer possible. Check the IPO prospectus or your broker’s website for the exact closing date and time.

Pro Tip: Act quickly! Delaying your cancellation request could result in missing the window, leaving you with allotted shares you may not want.

Step 2: Identify Your Application Method

The cancellation process depends on how you applied for the IPO. Here are the common methods and their respective cancellation steps:

Canceling an IPO Application via ASBA (Bank)

If you applied through your bank’s net banking portal using the ASBA process, follow these steps:

1. Log in to Your Bank’s Net Banking Portal: Access your bank’s online banking platform (e.g., HDFC, ICICI, SBI).
2. Navigate to the IPO Section: Look for the “IPO” or “Investment” tab in the menu.
3. Find Your Application: Locate the IPO application you wish to cancel. It’s usually listed under “Current Applications” or “IPO History.”
4. Select Cancel Option: Click on the “Cancel” or “Withdraw” button next to your application.
5. Confirm Cancellation: Verify your identity (via OTP or password) and submit the cancellation request.
6. Check Fund Release: The blocked amount in your account should be released within 1-2 working days.

Note: Some banks may require you to visit a branch for cancellation, though this is rare. Contact your bank’s customer service if you face issues.

Canceling an IPO Application via UPI

If you applied using a UPI-based platform (e.g.,VENTURA), here’s how to cancel:

1. Log in to the Broker’s App or Website: Open the app or website where you submitted the IPO application.
2. Go to the IPO Section: Find the IPO application under the “IPO” or “Orders” tab.
3. Select the Application: Choose the IPO application you want to cancel.
4. Click Cancel/Withdraw: Look for a “Cancel” or “Withdraw” option and confirm your request.
5. Verify UPI Mandate: Some platforms may require you to cancel the UPI mandate separately through your UPI app (e.g., Google Pay, PhonePe). Check the mandate status and revoke it if needed.
6. Monitor Fund Release: The blocked amount will be unblocked within 1-2 days.

Quick Tip: Ensure your UPI ID is active and linked to the correct bank account to avoid delays in fund release.

Canceling an IPO Application via Stockbroker

If you applied through a stockbroker like Zerodha, Upstox, or Angel One, the process is similar:

1. Access Your Broker Account: Log in to your broker’s app or website.
2. Locate the IPO Application: Navigate to the IPO section and find your application under “Open Applications” or “Order Book.”
3. Initiate Cancellation: Click the “Cancel” button next to the IPO application.
4. Confirm the Request: Follow the prompts to confirm cancellation, which may involve an OTP or password.
5. Check Status: Ensure the application status changes to “Cancelled” and the blocked funds are released.

Important: Some brokers may charge a small fee for IPO applications, which is typically non-refundable even after cancellation. Check your broker’s terms.

Step 3: Verify Cancellation Status

After submitting the cancellation request, confirm that the application has been successfully canceled. Check the application status on your bank, broker, or UPI platform. You should also verify that the blocked funds are released back to your account. If the funds remain blocked after 2-3 days, contact your bank or broker for assistance.

Step 4: Keep Records

Save a screenshot or confirmation email of the cancellation for your records. This can be helpful in case of disputes or delays in fund release. Most platforms send a confirmation email or notification once the cancellation is processed.

Things to Keep in Mind When Canceling an IPO Application

Canceling an IPO application is usually hassle-free, but there are a few things to consider to avoid complications:

• Timing is Critical: Cancellations are only allowed during the IPO application window. Once the window closes, you’ll need to sell the allotted shares in the secondary market if you don’t want them.
• No Charges for Cancellation: Most banks and brokers don’t charge for canceling an IPO application, but confirm with your provider.
• Partial Cancellation: In some cases, you can modify the number of shares applied for instead of canceling the entire application. Check if your platform allows this.
• Impact on Future Applications: Canceling an IPO application doesn’t affect your eligibility for future IPOs, but frequent cancellations may flag your account with some brokers.
• Fund Release Delays: While funds are typically unblocked within 1-2 days, delays can occur due to technical issues or high application volumes.

Common Challenges and How to Overcome Them

Sometimes, you may face issues while canceling an IPO application. Here’s how to tackle common problems:

• Platform Not Responding: If the broker or bank portal is down, try again after some time or contact customer support.
• UPI Mandate Issues: If the UPI mandate doesn’t cancel, check your UPI app and revoke it manually. You can also contact your bank for assistance.
• Funds Not Released: If the blocked amount isn’t released within 3 days, reach out to your bank or broker with your application details.
• Incorrect Application Details: If you made an error in your application, canceling and reapplying may be the best option, provided the IPO window is still open.

Why Timely Cancellation Matters

Canceling your IPO application on time ensures your funds are not locked unnecessarily. In India, the ASBA process blocks funds in your account until the allotment is finalized. If you miss the cancellation window, you may end up with shares you didn’t intend to hold, requiring you to sell them later, potentially at a loss if the market isn’t favorable. Acting promptly also gives you flexibility to redirect funds to other investment opportunities.

Alternatives to Canceling an IPO Application

If you’re unsure about canceling, consider these alternatives:

• Modify the Application: Some platforms allow you to edit the number of shares or bid price during the application window.
• Wait for Allotment: If the IPO is oversubscribed, you may not get any shares, negating the need for cancellation.
• Sell After Listing: If you miss the cancellation window, you can sell the shares once they list on the stock exchange.

Frequently asked questions 

1. Can I cancel my IPO application after the application window closes?
   No, you cannot cancel an IPO application once the application window closes. You’ll need to wait for the allotment and sell the shares in the secondary market if you don’t want them.

2. Will I lose money if I cancel my IPO application?
   Canceling an IPO application is usually free, and the blocked funds are released back to your account. However, some brokers may charge a non-refundable application fee.

3. How long does it take for funds to be unblocked after cancellation?
   Funds are typically unblocked within 1-2 working days after cancellation. Contact your bank or broker if there’s a delay.

4. Can I cancel an IPO application applied through a Demat account?
   Yes, you can cancel an IPO application through your Demat account provider or broker, provided the application window is open.

5. What happens if I don’t cancel and don’t get allotted shares?
   If you don’t get allotted shares (e.g., due to oversubscription), the blocked funds are automatically released back to your account after the allotment process.

Conclusion

Canceling an IPO application in India is a simple process if you act within the application window and follow the correct steps based on your application method. Whether you applied via ASBA, UPI, or a stockbroker, timely action ensures your funds are released without hassle. By understanding the process, verifying cancellation status, and keeping records, you can manage your IPO investments with confidence. Stay informed, act promptly, and explore other investment options if you decide an IPO isn’t right for you.

Ready to take control of your IPO applications? Follow this guide, and you’ll be prepared to cancel or modify your application with ease. For more investment tips and updates on upcoming IPOs, keep exploring trusted financial resources or consult with your broker.