The Indian IPO application system is genuinely well designed, and it is worth understanding because it protects you.
ASBA: your money stays with you
ASBA stands for Application Supported by Blocked Amount. When you apply, the money is blocked in your own bank account. It is not transferred anywhere.
- The amount is marked as unavailable for other use
- It stays in your account and keeps earning your normal savings interest
- It is debited only if shares are allotted, and only for the shares actually allotted
- If you get nothing, the block is simply released
ASBA is compulsory for public issues. This matters: before it existed, applicants sent money out, waited, and received refunds weeks later.
The UPI route
For retail applications through a broker, a UPI mandate is used to create the block.
The full sequence:
- Apply on your broker's app: select the IPO, quantity in lots, price (or cut-off, where permitted), and enter your UPI ID.
- Submit. Your broker sends the bid to the exchange, which routes a mandate request to your UPI app.
- Approve the mandate in your UPI app — Google Pay, PhonePe, BHIM, your bank's app, whichever is linked to that UPI ID. You will see a "block funds" request for the application amount.
- Funds are blocked. The money sits in your account, unavailable but yours.
- Wait for the issue to close and the basis of allotment to be finalised.
- Outcome:
- Allotted → the exact amount for allotted shares is debited, and the balance released
- Not allotted → the entire block is released
- Shares credited to your demat account before listing.
The bank ASBA route
You can also apply directly through your bank's net banking IPO section, using ASBA without UPI. The bank blocks the funds directly.
This route avoids UPI mandate limits and failures entirely, which makes it useful for larger applications. It is slightly less convenient, and the deadline through banks is sometimes earlier than through brokers.
What you need before you start
- A demat account — and note that the application must be in the name of the account's first holder
- A PAN, which must match the demat account
- A bank account in the same name, with sufficient balance
- A UPI ID linked to that bank account, if using the UPI route
Timings on the closing day
The bidding window closes earlier than people expect, and the exact times are published for each issue. Broadly:
- Bidding closes in the afternoon on the final day
- Mandate approval is permitted for a short further window after that
- Bank ASBA deadlines may be earlier still
The specific cut-off times are in the RHP and on your broker's IPO screen, and SME issues follow their own published timings. Treat the published time as a hard deadline, and do not leave it to the last hour.
Checking allotment
After the basis of allotment is finalised:
- On the registrar's website (KFin, Link Intime, MUFG Intime — the RHP names the registrar), using your PAN or application number
- On the BSE website, in the IPO allotment status section
- In your broker's app
- Your demat statement shows the credit before listing
Common reasons applications are rejected
- Multiple applications on the same PAN
- PAN and demat details not matching
- Bank account not in the first holder's name
- UPI mandate not approved in time
- Insufficient balance when the block is attempted
- Bid below the final issue price
- Quantity not in whole lots
Almost all of these are avoidable with five minutes of care.
Key takeaways
- Under ASBA your money is blocked in your own account and keeps earning interest.
- Funds are debited only for shares actually allotted; everything else is released.
- The UPI mandate must be approved within its window or the application is void.
- PAN, demat first holder and bank account must be the same person.
- Apply well before the deadline — mandate delays on the last day cause avoidable failures.
Check your understanding
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