What happens after an IPO bid is placed
After an IPO bid is placed, the application moves through a fixed sequence: a UPI mandate you approve, a lien placed on your bank account under ASBA , the bid forwarded to the exchange where it counts towards subscription, the basis of allotment finalised by the registrar , and then either a debit and demat credit if you are allotted or a release if you are not, ending in listing. The whole cycle runs to a SEBI-mandated T+3 timeline, three working days from the issue’s close to the start of trading. This article walks each stage so you can read your bank balance, your Kite bid card, and the allotment portals against where the application actually is.
It is written for the investor who has bid through Zerodha Kite or another UPI-ASBA platform and wants to understand the mechanics rather than refresh a status page in the dark. The sequence is identical across brokers because the post-bid process is run by the exchanges, the registrar and the self-certified syndicate banks under SEBI’s framework, not by the broker.
Conflict-of-interest disclosure. This article is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this article does not carry it and earns no referral commission from the procedure described here.
Stage 1: the UPI mandate and the block
Placing the bid in Kite is only the first half of applying. Within minutes, your UPI ASBA app receives a one-time mandate request for the bid amount. You authorise it with your UPI PIN, and the bank places a lien on your savings account for the maximum payable value, the bid quantity times the upper end of the price band for a cut-off bid. The deadline to approve the mandate is 5 pm on the issue’s closing day; a mandate not approved by then leaves the application void.
The block is a lien, not a debit. The book balance shown in your passbook does not change; only the available balance falls by the blocked amount. The money stays yours throughout the subscription period and continues to earn savings-account interest on the full book balance, including the liened amount. You cannot spend the liened amount until the block is released or converted, which is why an IPO application ties up funds for the five to eight working days from mandate approval to allotment.
Stage 2: exchange forwarding and subscription
Once the block is in place, the bid is forwarded to the stock exchange’s electronic book-building platform, where it joins the issue’s order book. From this point the application is one line in the aggregate demand that produces the live subscription figures the exchanges publish through the day. The figures are reported separately for the retail , non-institutional and qualified institutional buyer categories, and a multiple in one category says nothing about another. Anchor investors are allotted a day before the issue opens and sit outside this live count.
The subscription figures matter for what comes next, because they determine whether allotment in your category is by draw or guaranteed. They do not change your odds at this stage, and the day within the window on which you bid does not enter the allotment, a point developed in how to improve IPO allotment chances . You can still modify the bid up to three times or delete it during market hours until the issue closes.
Stage 3: issue close and the basis of allotment
The issue closes at the end of the bidding window, which is T, the transaction day for the T+3 cycle. After close, the registrar takes over. It runs third-party verification on every application, cross-checking PAN against the linked demat and bank account and against SEBI’s database of debarred entities, and rejects any application that fails, before any allotment is computed. Valid applications then go to allotment.
The basis of allotment is finalised on T+1. For an oversubscribed retail tranche, SEBI’s ICDR Regulations, 2018, mandate a computerised lottery on the count of valid applications, with a minimum-one-lot guarantee where enough lots exist; for the small-NII and big-NII sub-categories created by SEBI’s 16 December 2021 reform, allotment is a draw within each sub-category with a minimum-lot guarantee. The full per-category methodology is set out in IPO oversubscription allotment . The finalised basis-of-allotment document is published on T+1 on the registrar’s portal, the lead manager’s site, and the exchange websites, and your individual status, allotted or not allotted, becomes checkable by PAN or application number.
Stage 4: debit, release and demat credit
What happens to your block depends on the allotment outcome.
If you are allotted shares, the allotment consideration, the allotted shares times the final issue price, is debited from your blocked amount, and any surplus is released. The allotted shares are credited to your demat account by T+2. If you bid at cut-off and the issue priced below the upper band, the consideration is at the lower final price, so the surplus released is larger; the demat shows the shares before listing.
If you are not allotted, the entire block is released. The registrar instructs the sponsor bank, an SCSB, to lift the lien, and the available balance is restored. SEBI’s rules require UPI IPO refunds to be initiated within four working days of the issue’s close, and in practice the release reflects in the bank by T+1 evening or T+2 morning, appearing as an entry such as IPO mandate cancellation, lien released, or UPI block reversal. The release is fully automated and needs no action; tracking and escalation, if a block persists, are covered in how to release blocked IPO funds after non-allotment and how to fix an IPO refund not received on Zerodha . For partial allotment, where you bid more than you were allotted, the debit and the surplus release both occur, typically on T+1.
Stage 5: listing and the start of trading
Trading in the newly listed shares begins on T+3, the listing day, three working days after the issue closed. The SEBI T+3 listing timeline, notified by circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023 and made mandatory for all issues from December 2023, compressed the earlier T+6 cycle. By the time trading opens, allotted shares are already in the demat and non-allottees’ funds are already released, so the listing day is purely about price discovery, not about settlement of the application. What the listing-day price does, the pre-open session, and the tax on listing-day gains are covered in IPO listing day .
The T+3 timeline at a glance
| Event | Working day |
|---|---|
| Bidding window open, modifications allowed | Before T |
| Issue closes | T |
| Registrar verifies applications and finalises basis of allotment | T+1 |
| Block released for non-allottees; surplus released; allotment debited | T+1 |
| Allotted shares credited to demat | T+2 |
| Lien release reflected in bank for non-allottees | T+1 evening to T+2 morning |
| Listing and start of trading | T+3 |
The counting begins at the issue’s closing day as T and runs in working days, so weekends and exchange holidays extend the calendar gap between close and listing even though the T+3 working-day count is fixed.
What can delay the sequence
Most applications run the timeline cleanly, but a few points slip. A mandate not approved by 5 pm on the closing day voids the application before it ever reaches allotment. A registrar rejection on PAN, third-party UPI, or a frozen demat drops the application before the draw, covered in how to avoid an IPO rejection on Kite . On the release side, the registrar’s instruction is prompt, but a smaller or cooperative bank can take an extra 24 to 72 hours to lift the lien, and in some cases a UPI mandate is unblocked only at its expiry. None of these change the regulatory T+3 listing schedule; they affect when an individual application’s funds move within it.
References
- SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023, T+3 listing timeline for public issues.
- SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, Regulation 62 on basis of allotment, refunds and release of blocked amounts.
- SEBI, FAQs on UPI in the public issue process, July 2019 (mandate approval cutoff; block-not-debit mechanism; four-working-day refund initiation).
- NPCI UPI 2.0 one-time mandate (block) specification for public issues.
See also
- Initial public offering
- IPO process in India
- ASBA
- UPI ASBA
- UPI mandate
- Basis of allotment
- IPO oversubscription allotment
- How to improve IPO allotment chances
- Why the blocked amount is unchanged after modifying an IPO bid
- How to avoid an IPO rejection on Kite
- How to release blocked IPO funds after non-allotment
- How to fix an IPO refund not received on Zerodha
- How to fix a UPI mandate timeout for an IPO
- Cut-off price
- IPO price band
- IPO lot size
- Retail individual investor
- Non-institutional investor
- Qualified institutional buyer
- Anchor investor
- Self-certified syndicate bank
- Registrar to an issue
- IPO listing day
- Demat account
- How to check IPO allotment on Zerodha
- How to check IPO allotment on the registrar’s site
- How to check IPO allotment via BSE and NSE
- How to apply for an IPO on Kite web
- Kite by Zerodha
- Zerodha
External references
- SEBI: T+3 listing timeline circular, 9 August 2023
- SEBI: Issue of Capital and Disclosure Requirements Regulations, 2018
- NSE: IPO and offer for sale
- BSE: IPO and check application status
- Zerodha support: IPO
WebNotes Editorial Team prepares factual reference articles based on publicly available regulatory documents and exchange disclosures. WebNotes is not affiliated with Zerodha Broking Limited or any registrar. The listing timeline is set by SEBI and subject to amendment; verify the current position at sebi.gov.in before acting.