How to release blocked IPO funds after non-allotment

From WebNotes, a public knowledge base. Last updated 12 May 2026. Reading time ~8 min. Level: Beginner.

Key facts

What the block is	A lien on your savings account via UPI ASBA; not a debit or transfer
When block is released (non-allotment)	T+1 working day after issue close; release reflected in bank by T+2 at the latest
When block is partially released (allotment)	Allotment consideration debited; surplus lien released on T+1
Interest on blocked funds	Savings account interest continues to accrue on the full balance including the lien amount
No action required in most cases	The release is fully automated; no action in Kite or the UPI app is needed

In the UPI ASBA mechanism, the money in your bank account is never transferred to the issuer at the time of the IPO bid. Instead, the sponsor bank places a lien (a block or hold) on your savings account for the bid amount. The book balance of your account does not change; only the available balance decreases. The lien earns savings interest at the same rate as the rest of your balance.

After the allotment process is complete, the block is released (for non-allottees), partially released (for allottees who bid more than the allotted value), or converted to a debit (for the allotment consideration). In the vast majority of cases, this happens automatically within one to two working days of the bid window closing. This guide explains the timeline, how to verify the release, and what to do if the block does not release.

Understanding the lien: what is blocked and what is not

When you authorise the UPI mandate for an IPO:

Book balance (the balance shown in your passbook or bank statement), unchanged. The lien is not a debit.
Available balance (the balance you can use for payments and withdrawals), reduced by the lien amount.
Interest accrual, continues on the full book balance, including the liened amount.

The practical effect is that you cannot spend the liened amount during the IPO subscription period (from mandate approval until the allotment process is complete). This period is typically five to eight working days (bid open to T+2).

The automatic release timeline

Under the SEBI T+3 listing regime:

Event	Working day
Bid window closes	T+0
Registrar publishes basis of allotment	T+1 (by midnight)
Sponsor bank receives release instruction	T+1 (within hours of basis of allotment)
Lien release reflected in bank (non-allotment)	T+1 evening or T+2 morning
Allotment debit + excess lien release	T+1 (for allotted applicants; excess released)
Demat credit (allotted shares)	T+2
Trading commences	T+3

For non-allotted applicants, the lien-release entry typically appears in the bank account on T+1 evening or by T+2 morning at the latest. The entry appears in the bank’s transaction history as IPO mandate cancellation, Lien released, or UPI block reversal (the exact label varies by bank).

Step-by-step procedure

Confirm non-allotment status

Before expecting a lien release, confirm that you were indeed not allotted. Check:

Zerodha Kite, navigate to Bids → Order history. The bid card should show Not Allotted.
Registrar portal, check at ipostatus.kfintech.com or linkintime.co.in/MIPO/Ipoallotment.html with your PAN and application number.
BSE/NSE portal, check at bseindia.com/investors/appli_check.aspx or the NSE allotment portal.

If the status is Allotted and you see a debit (not a release), the funds were used to pay for your allotted shares. In that case, see the note below on partial release for allotted applicants.

Wait for the automatic lien release

The lien release requires no action from you. Once the registrar publishes the basis of allotment and instructs the sponsor bank, the bank releases the lien automatically. The release propagates to your available balance within a few hours.

Do not attempt to manually cancel the mandate in your UPI app; the mandate cancellation is handled by the bank on instruction from the registrar. Manually cancelling may interfere with the bank’s processing and can cause confusion.

Verify release in your bank app on T+1 or T+2

Open your bank’s mobile app or NetBanking. Check two things:

Available balance, has it increased by the lien amount?
Transaction history, is there a lien released, UPI mandate cancellation, or similar entry?

If both the available balance is restored and the transaction history shows a release entry, the lien has been successfully released. No further action is needed.

If the block persists beyond T+2, contact Zerodha

If the lien is still visible in your bank account at the end of T+2 (the working day before listing) and the allotment status clearly shows Not Allotted, raise a ticket with Zerodha support.

To raise a ticket: go to support.zerodha.com, select IPO → Allotment and refund, and describe the issue. Include:

Your Zerodha client ID.
The issue name and application number.
The allotment status (Not Allotted) with the source (registrar portal).
The current available balance in the bank showing the lien is still held.
The mandate reference number (visible in your UPI app under Manage mandates or in the mandate approval email/notification).

Zerodha’s IPO support team can escalate to the sponsor bank on your behalf.

The sponsor bank (HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, SBI, or another named sponsor bank in the RHP) holds the lien and is responsible for releasing it. Contact the bank’s UPI grievance desk:

Reference to provide, the mandate reference number from your UPI app (visible in the mandate history or the original mandate notification email from the UPI app).
Cite, the basis of allotment publication date (T+1 of the issue) and the registrar’s Not Allotted status.

Most banks have a UPI grievance desk reachable through their customer care number or in-app chat.

As a last resort, escalate to SEBI SCORES

If the broker and the bank have not resolved the lien release within seven working days of the basis of allotment publication, file a complaint on SEBI’s SCORES portal at scores.sebi.gov.in. SEBI SCORES is a statutory investor grievance redressal system. Complaints on SCORES are forwarded to the relevant intermediary (broker or bank) with a mandatory acknowledgement and response timeline.

Partial release for allotted applicants

If you were allotted shares, the lien release is partial:

The allotment consideration (allotted shares times issue price) is debited from your bank account.
The surplus (mandate block minus allotment consideration) is released as a lien release.

For example, if your mandate block was Rs 15,000 (1 lot at the upper price band) and the final issue price resulted in an allotment consideration of Rs 14,250, your bank statement shows:

A debit of Rs 14,250 (allotment consideration).
A lien release of Rs 750 (surplus block).

Both entries typically appear on T+1. If the debit appears but the surplus release does not within T+2, contact Zerodha support.

If you bid at cut-off and the issue priced below the upper band

If you bid at the cut-off price and the issue was priced below the upper end of the price band, the mandate was blocked at the upper-band price. The allotment consideration is at the final (lower) price, so the surplus block is larger. The same T+1 release timeline applies for the surplus.

What can go wrong

Lien released but bank shows incorrect release amount. Compare the released amount with your bid value. Contact the sponsor bank if there is a discrepancy (the released amount should equal the full bid value for non-allottees, or the surplus for allottees).
Multiple IPO bids in one day and unclear which lien corresponds to which issue. Check the mandate reference number in your UPI app against the bid reference in Kite to map each lien to each issue.
Issue withdrawn after closure. If the issuer withdraws the issue after the bid window closes (which is rare but permissible under SEBI ICDR Regulations 2018), all mandates are released. The timeline for release in a withdrawal scenario may be slightly longer (T+3 to T+5).

References

SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018, Regulation 62 (Basis of Allotment and Refunds).
SEBI Circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023, T+3 listing timeline.
NPCI UPI 2.0 mandate specification (block mandate type), https://www.npci.org.in/what-we-do/upi/product-overview.
SEBI SCORES investor grievance portal, https://scores.sebi.gov.in.
FAQs on UPI in Public Issue Process, SEBI, July 2019.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 12 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.