You must have come across a scenario where you have applied for an IPO but unexpectedly there are delays in the allotments. IPO allotment delays are not uncommon, and they can occur due to a mix of practical and regulatory reasons. Here’s a breakdown of the main causes:
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Oversubscription & Data Reconciliation
Many times IPOs are heavily oversubscribed. For example if a company has a good reputation with a very good balance sheet, these companies are normally oversubscribed. When such cases happen registrars receive millions of applications and each of these applications has to be matched with the bank’s blocked funds which is also called ASBA.
In such cases if there is a mismatch of PAN, DP ID, bank details which slows down the verification process. -
Banking / ASBA System Delays
During the ASBA process some bank accounts take longer to process or update the blocked funds. These can also be caused with UPI related issues due to failed mandates and technical glitches. -
Registrar Technical or Backend Issues
In many cases when there is large processing of datasets such as large scale applications, there can be a lot of hiccups, such as the system sometimes misreading the PAN-DP ID, duplicate applications, UPI mandate failures. These issues can delay the basis of allotment finalization. -
Exchange or SEBI Review
The exchange and SEBI reviews data for various compliance issues such as suspicious transactions, incorrect filings, investor complaints etc. If these are flagged then there can be a case where the allotment gets paused until clearance is given. -
Retail UPI Mandate Issues
There are cases where pending mandates are yet to be approved. An allotment can’t proceed until investors approve their UPI mandates. These pending mandates then auto expire. A large volume of incomplete or delayed approvals causes backlogs. -
Corporate Action or System Glitches
The final share credit needs corporate action files from the registrar to NSDL/CDSL
Delays occur due to factors such as ISIN mismatch, file upload errors, system integration issues which are between depositories and registrars. These then cause a delay in the allotment process. -
Holidays or Administrative Delays
In some cases when the allotment/refunds fall near weekends or bank holidays, this causes delays for about 1 to 2 working days by default.
Typical IPO Allotment Timeline
Once the IPO closes, here’s a general idea of what happens next:
- Day 3–4: The Basis of Allotment is finalized.
- Day 4–5: Refunds are Initiated.
- Day 5–6: Shares are Credited to Your Demat Account.
- Day 6–7: The Shares are Listed on the Stock Exchange.