How to Cancel an IPO Application: Step-by-Step Guide
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- Published 18 Dec 2025
An Initial Public Offering (IPO) allows investors to apply for a company’s shares before they are listed on the stock exchange. However, once an application is submitted, market conditions or personal decisions may lead an investor to withdraw it. The cancellation process is time-bound and must be completed before share allotment.
This article explains how to cancel IPO applications and the key points investors should keep in mind.
Understanding the IPO application and allotment process
The IPO application and allotment process has become much faster in recent years, thanks to regulatory reforms and digitisation. A decade ago, it often took weeks to go from applying to receiving share allotments and finally getting listed on the stock exchange. Now, the Securities and Exchange Board of India (SEBI) has made it mandatory to list shares in the exchange on a T+3 timeline.
- “T” stands for the day on which the IPO application ends, the closing day.
- T + 1 = The IPO registrar finalises the basis of allotment.
- T + 2 = Application money received through Application Supported by Blocked Amount (ASBA) is unblocked. The registrar processes refunds to applicants who are not eligible for allotment of shares.
- T + 3 = Allotted shares are credited to the depository account of the successful applicants and also listed on the exchanges. Public trading begins at 10 am. At this stage, investors who received shares can either sell them immediately or hold them for long-term gains.
As per the SEBI regulations, cancellation of IPO application is possible for a specific category of investors and within a specified timeline.
Who is eligible to cancel IPO applications?
The answer to the question, “Can I cancel IPO application before allotment?”, depends on the category of investor you belong to. SEBI categorises IPO applicants into three main categories:
- Qualified Institutional Buyers (QIBs)
- Non-institutional investors (NIIs)
- Retail investors
The rules regarding cancellation of IPO application are:
Qualified institutional buyers | Financial institutions such as mutual funds, insurance companies, pension funds and banks | Not eligible to cancel the application |
Non-institutional investors | These are ultra-high-net-worth and high-net-worth investors (individuals and non-individuals) applying for shares worth more than ₹2 lakh | Eligible to modify their bids but not eligible to cancel the application |
Retail investors | Individual investors applying for shares worth less than ₹2 lakh | Eligible to cancel or modify application before the end of the application period (T) |
So, only the retail category investors are eligible to cancel their IPO application on or before the IPO closing date (T).
What is the last date for cancelling the IPO application?
An IPO application may remain open for bidding for several days. Usually, the application period lasts for 3 to 7 days. Through this period, a retail category investor can cancel or modify a bid. IPO closing date (T) is the last date for cancelling or modifying IPO applications for retail investors. From the “T+1” date, any cancellation or modification is not possible.
How to cancel IPO application before allotment
Retail investors must apply for an IPO through the ASBA channel. If you’re wondering how to cancel an IPO application made via ASBA, you can follow these simple steps.
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Step 1: Log in to the online portal of the bank that provides the ASBA facility. Alternatively, you can log in through the trading or brokerage application used to submit the IPO bid.
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Step 2: Navigate to the IPO tab and open the IPO order book. The order book displays all the IPO applications you have submitted.
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Step 3: Locate and select the IPO transaction ID of the application you wish to cancel.
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Step 4: Once you select the application, the system will display options to modify or cancel your bid.
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Step 5: Click cancel to withdraw the IPO application. Once formally cancelled, the respective bank confirms the cancellation. This confirmation is essential.
Things to remember while cancelling an IPO application
Investors who wish to modify or look for how to cancel IPO application should keep the following points in mind.
- The deadline is critical for cancellation and modification. The IPO application closing date is the last date for cancelling IPO bids.
- Modifications and cancellations of bids are possible only between 10 am and 5 pm.
- Cancellation or modification is not allowed after 5 pm on the IPO application closing date.
- Once the cancellation is processed, banks will release the funds blocked under ASBA within a maximum of five days.
- The bank’s confirmation about the cancellation is essential for further communication and tax documentation.
- There are no charges to cancel or modify IPO bids.
Common reasons for cancelling IPO applications
While investors are not required to provide a reason when cancelling an IPO application, some common factors that lead to cancellations include:
- Sudden negative news affecting the company’s fundamentals.
- Deterioration of market sentiment towards the company or its promoters.
- Changes in overall market sentiment.
- Lack of liquidity or an inability to keep funds locked in equity investments for a longer duration.
Conclusion
IPOs can offer excellent opportunities for both quick returns as well as long-term investments in fundamentally strong companies. However, factors like market volatility or weak company fundamentals can hamper potential returns.
Before applying for an IPO, it’s crucial to analyse the company’s business model and financial health. Additionally, knowing how to cancel IPO applications can help you avoid having your money stuck in poorly performing IPOs.
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