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By IPOCheckr Editorial TeamLast reviewed
An IPO application that is invalid never enters the allotment draw, however strong the issue. The usual causes are simple: the UPI mandate was not approved by 5 pm on the closing day, the UPI ID or bank account belongs to someone else, the PAN does not match the demat account, the same PAN applied twice, or the bid was below the final price or above the category limit. Most can be avoided with a two-minute check before you submit.
Approve the UPI mandate in your UPI app before 5 pm on the closing day.
PAN, demat and the bank account behind the UPI ID must all be yours.
Multiple applications with the same PAN in a category can all be rejected.
Retail up to ₹2 lakh; bid at cut-off or within the final price.
Submitting the bid in your broker app is only half the job. The exchange sends your bid to the sponsor bank, which sends a mandate request to your UPI app. Until you approve it with your UPI PIN, no money is blocked and the bid is not complete.
Under SEBI's current T+3 timetable, UPI mandates must be accepted by 5 pm on the issue closing day. A mandate approved later is not counted, even if your bank shows a block.
Fix: approve within minutes of applying, and apply by the second day of the issue. If no request arrives within an hour or so, check the UPI ID you entered and your broker's order status, then re-apply if the first bid failed.
SEBI's rules require you to use only your own bank account or a UPI ID linked to your own bank account. Applications using a third-party bank account or UPI ID are liable for rejection, and the registrar runs a third-party check on UPI applications.
Typical case: a son applies from his demat account but enters his father's UPI ID because his own account has insufficient balance. The father approves the mandate and money is blocked – but the application is rejected at the third-party check, and the money is later unblocked.
Fix: each applicant uses a UPI ID linked to a bank account in their own name. Joint bank accounts generally work if the applicant is the first holder; check your bank.
The PAN and demat details you bid with are validated with the depositories in real time. If the PAN on the application does not match the PAN on the demat account, or the demat account is inactive, frozen or closed, the bid fails or is rejected.
Name spelling differences between your bank and demat account rarely matter on their own, but a PAN that is not linked to Aadhaar (and therefore inoperative) or a demat account frozen for incomplete KYC can block you.
Fix: log in to your depository (CDSL or NSDL) or broker profile and confirm the demat account is active, the PAN matches and KYC is complete before the issue opens.
SEBI's framework allows one application per PAN per category. If you apply from two brokers, or twice from the same broker, the duplicates are liable to be rejected – and in some cases every application under that PAN is treated as a multiple bid.
Fix: if you want to change a bid, modify or cancel the existing one (retail bids can be modified or withdrawn until the issue closes) instead of placing a second one. Eligible employees and shareholders are the exception: they can apply in their reserved category as well as retail.
If you enter a specific price, say ₹290 in a ₹280–300 band, and the issue is priced at ₹300, your bid is outside the final price and is not eligible for allotment.
Fix: retail investors can tick ‘cut-off’. That commits you to pay whatever final price is fixed, and the amount blocked is calculated at the top of the band.
Retail bids cannot exceed ₹2 lakh. Most broker apps stop you, but if you bid more than ₹2 lakh you are treated as a non-institutional investor – with different rules: no cut-off bidding, no withdrawal and different allotment odds.
Worked check: with a lot of 48 shares and an upper band of ₹310, one lot is ₹14,880. Thirteen lots is ₹1,93,440 (retail); fourteen lots is ₹2,08,320 (NII).
UPI also has a limit. Blocking through UPI is currently permitted for bids up to ₹5 lakh; larger individual bids need net banking ASBA or bank-based ASBA through your broker.
SEBI publishes lists of self-certified syndicate banks live on UPI and of UPI apps and handles that can be used for public issues. An application using a bank or handle not on the list is liable to be rejected.
Fix: check SEBI's list once, and keep a UPI ID on an approved app and bank for IPOs.
If your account does not have the full bid amount when you approve the mandate, the block fails. Some banks also apply daily UPI transaction limits that interfere with large mandates.
Fix: keep the full amount available for at least a day after approving, and do not move it until the block shows.
Run through this before every application.
Primary rules and official pages this guide was checked against. Rules change, so the official text always prevails.
General information, not investment advice. Rules set by SEBI, RBI and the exchanges can change, so confirm current limits with your broker or the offer document.