Why IPO Allotment Gets Rejected
Introduction
IPO allotment rejection happens when an application is considered invalid or non-compliant with SEBI and exchange rules. Even if demand is high, rejected applications are excluded entirely from the allotment process.
Multiple Applications Using Same PAN
Submitting more than one IPO application using the same PAN in the same category is strictly prohibited.
If detected, all such applications are rejected, regardless of how or where they were submitted.
UPI Mandate Not Approved or Failed
For UPI-based IPO applications, the investor must approve the mandate request before the issue closes.
If the mandate is not approved, fails, or expires, the application is treated as invalid and rejected.
Incorrect PAN, Demat, or Bank Details
Mismatch or errors in PAN number, Demat account ID, or bank details lead to technical rejection during validation.
Even small typographical mistakes can result in rejection.
Insufficient Balance at Blocking Time
IPO applications require the full amount to be blocked in the bank account via ASBA or UPI.
If sufficient funds are not available at the time of mandate execution, the application is rejected.
Wrong Price or Cut-Off Selection
In book-built IPOs, bidding below the final cut-off price makes the application invalid.
Retail investors are advised to select the cut-off option to avoid this risk.
Incorrect Investor Category
Choosing an investor category that does not match the application amount or eligibility rules can cause rejection.
For example, applying above the retail limit while selecting the retail category.
Exceeding Retail Investment Limit
Retail Individual Investors must keep their application value within ₹2 lakh.
Applications exceeding this limit are either rejected or shifted out of the retail category.
Technical or Broker-Level Issues
System errors, connectivity issues, or broker-side failures can prevent proper submission or confirmation of the application.
Such applications may never reach the exchange and are therefore rejected.
Late Submission or Modification
Applications submitted or modified after the IPO closing time are not considered.
This often happens due to last-minute rush or delayed UPI approvals.
Key Points to Remember
- Only one valid application per PAN is allowed
- UPI mandate approval is mandatory
- Details must match across PAN, Demat, and bank records
- Rejected applications do not participate in allotment at all
Disclaimer
This document is provided for educational and informational purposes only. IPO rejection reasons may vary across issues, intermediaries, and regulatory updates. Always refer to official IPO documents and broker communications.