IPO Application Modification

After an investor has submitted a bid for an IPO, there can be situations where the investor might like to modify the bid price or quantity to improve his chances of allotment depending upon the demand of the IPO. At times, it might even occur such that the investor might feel that the IPO is incorrect and would want to cancel and withdraw his bid.

The IPO cancellation and amendment facility facilitates investors to do these desired changes.

There are some rules and limitations for cancellation and amendment of the IPO.

• Only retail investors can cancel IPO bid.
• QIBs and NIIs cannot cancel the bids once they have been made.
• Retail investors can modify the bids to decrease or increase the application size.
• QIBs and NIIs have no option to decrease the bid size. They can only upgrade their bid.
• Modification and cancellations are permissible at any point during the IPO is open for subscription.
• IPO post-issue modification period - There are no post-issuance modifications permitted in an IPO. The bid modification is permitted only while the bid is being submitted.

Note: Investors may verify with their broker/bank beforehand for the cancellation/modification time on the last day.

Rules depending on investor category

The following table outlines the rules for IPO cancellation and modification:

Once the investor makes an IPO application, the investor may like to cancel or amend the application according to IPO demand, fresh information, or individual considerations. This instruction illustrates when and how investors can cancel or alter their IPO offers.

1. IPO Application Cancellation

When You Can Cancel

• You are allowed to cancel at any point in time within the IPO subscription time.
• Timing: 10 AM on the opening date of the issue to 5 PM on the closing date of the issue.
• It is permitted only for retail investors to withdraw their IPO bids.
• QIBs (Qualified Institutional Buyers) and NIIs (Non-Institutional Investors) are not permitted to withdraw bids after they are made.

How to Cancel IPO Application Online:

• Login to your broker's site or Net banking.
• Proceed to the IPO section.
• Choose the IPO that you have applied.
• Click on Cancel, Delete, or Withdraw Bid.
• Confirm the transaction.
• Cancel the UPI mandate, if any.

Note: A few banks may refund automatically on the expiry of the UPI mandate. Investors can contact their banks to ascertain UPI-specific procedures.

How to Cancel IPO Application Offline:

• Compose a cancellation letter with:
  • IPO Application Number
  • Applicant Name and Application Details
  • PAN Number
• Sign the letter.
• Forward it to the broker or bank where the application was made.

IPO Application Cancellation Time:

• Investors can cancel bids between 10 AM and 5 PM during the time when the IPO is open.
• There may be a cut-off time earlier in the day on the final day, so it would be best to find out ahead of time.
• Cancellation is free and may be done online or offline.
• As an example, Zerodha offers cancellation from 10 AM to 4:30 PM during the IPO subscription period.

Who Can Make Changes in IPO Bids?

• Retail Investors: Can increase or reduce the bid amount or price.
• QIBs and NIIs: Can increase but cannot decrease the bid amount or price.
• Employees and Shareholders (with bid size below Rs 2 lakhs): Can increase or reduce their bid.

Modification Window:

• Modification is possible from 10 AM on the IPO opening date to 5 PM on the IPO closing date.
• Always check with the broker or bank about cut-off times on the final day.

Procedure to Change IPO Application Online:

• Log in to broker platform or Net banking account.
• Proceed to the IPO section.
• Choose the applied IPO.
• Click on Modify Bid.
• Modify the bid quantity or bid price.
• Click on Confirm or Update.
• Approve the new UPI mandate.

Note:
In the event of an ASBA application:
• If bid amount is increased, the extra amount will be blocked.
• If the bid quantity is reduced, the balance amount will be released after allotment.

Steps to Make Changes in IPO Application Offline:

• Take the IPO change form from the broker, bank, or exchange website.
• Fill up the form with the following information:
  • Name, Address, Contact, Email, PAN, DP ID
  • Original bid details
  • Updated bid details
  • ASBA account or UPI ID
• Sign the form.
• Submit it to the same intermediary where the original application was made.

IPO Modification Forms

• Forms can be downloaded from:
  • NSE Website: https://www.nseindia.com/products-services/equity-new-issues-initial-public-offerings-ipo
  • BSE Website: https://www.bseindia.com/

While applying for an IPO, investors should go through all the application procedures carefully. Any mistake, technical fault, or mismatch in information will lead to the application rejection. The rejection can be for the investor's fault, intermediary fault, or technical fault.

Typical Reasons for Rejection of an IPO Application

• Ineligible Applicant
  The application is submitted by an individual who is not eligible as per the company's terms or as per the Indian Contract Act, 1872.
• Bid Price Outside Price Band
  An investor inputs a price that falls below the lower price band or above the upper price band.
• Incorrect ASBA Account Number or UPI ID
  An incorrect bank account number or UPI ID is entered while applying.
• Application from a Third-Party Bank Account
  The application is filed on a bank account other than the applicant's.
• Incorrect PAN or DP Details
  The PAN or DP ID entered is incorrect or invalid.
• Mismatch in Name Across Accounts
  The name on the PAN, demat account (DP), and bank account should be the same. Any difference can result in rejection.
• Bid Amount Lower Than the Minimum Bid Lot
  Applications less than the minimum application size are invalid.
• Multiple Applications Under Same PAN
  More than one application in the same investor category with the same PAN may lead to rejection of all bids.
• Cut-Off Price Bidding by Ineligible Categories
  Retail investors alone can apply at the cut-off price. QIBs and NIIs' bids will be rejected if they choose the cut-off option.
• Insufficient Funds in Bank Account
  The account associated with the application doesn't have the funds to freeze the amount needed.
• Intermediary Mistakes
  Bank, broker, or other intermediary mistakes while processing the application.

IPO Application Rejected But Amount Blocked

• In case an IPO application is rejected after the approval of the UPI mandate, the amount will get blocked for some time.
• Some banks refund the blocked money only after the UPI mandate has expired.
• Investors can call their bank or intermediary to check when the blocked amount will be released or refunded.

Glossary

UPI Handle

The virtual payment address (VPA) of the bank or UPI application used to make the payment is known as the UPI handle.
Illustration: In case of Paytm being utilized, the UPI handle will be @paytm.

DP ID (Depository Participant Identification)

DP ID is provided to institutions such as banks or brokers registered with NSDL or CDSL.
The investor's demat account number is comprised of the DP ID and client ID combined, creating a single identifier.