Investing in an Initial Public Offering (IPO) can be exciting because it gives you early access to a company that`s about to start trading on the stock market. But sometimes, you might want to back out and cancel your IPO application before the official date. This could happen if you made a mistake in your application or if you`ve changed your mind about participating. It`s important to understand the right steps to take in such cases.
In this blog, we`ll explain how to cancel an IPO application, why someone might want to do it, and what could happen if you don`t properly cancel your application.
What is an IPO Application?Before we talk about how to cancel your IPO application, let`s first understand what it means. An IPO application is when an investor asks to buy shares of a company during its initial public offering. When a company goes public, it sells its shares to both big investors and regular people. If you apply through a broker, you usually have to fill out a form and put money or a loan as security for the shares you want to buy. Once the IPO starts, you might get the shares or not, depending on how much demand there is and the rules for giving out shares.
Why Cancel an IPO Application?There are many reasons why an investor may decide to stop an IPO application. Some of these reasons are:
- Change of Mind: You may have second thoughts after initially applying.
- Financial Changes: If your financial situation changes and you can`t afford to invest anymore, you may need to cancel your application.
- Inaccurate Details: You might have entered wrong details like the number of shares you wanted to purchase or the way you paid.
- Risk Considerations: After looking into it more, you may think the company isn`t the best choice for your investment.
No matter why you`re canceling, it`s important to properly cancel your application to prevent problems or getting shares you didn`t want.
How to Cancel an IPO Application: A Step-by-Step GuideCanceling your IPO application isn`t as hard as it might look, but the steps can be a bit different based on how you originally applied. Here`s a general guide to help you through the process.
1. Canceling through Your BrokerIf you applied for an IPO through an online brokerage like Zerodha, Upstox, or Groww in India, here are the steps you should follow:
a) Check IPO Status Most brokers let you cancel your IPO application before the bidding ends or the issue date comes. You should check your IPO application status to make sure you can still cancel it.
b) Log into Your Broker Account Once you`re logged in, find the section that shows your current IPO applications. It will list the IPOs you`ve applied for and give you the option to cancel if it`s still possible.
c) Cancel the Application Choose the IPO application you wish to cancel and find the cancellation option. It might be a button that says "Cancel IPO," "Withdraw Application," or another similar label. Read the instructions carefully and confirm your decision to cancel.
d) Confirmation After your application is canceled, you should get a message from the brokerage saying that your IPO application has been removed.
2. Canceling via UPI (In India)In countries like India, a lot of people who invest in the stock market use UPI (Unified Payments Interface) to pay for IPOs. If you applied for an IPO through UPI, here`s what you should do:
a) Check the UPI Mandate Status Once you apply, a UPI mandate is created for the IPO. If your application is still in the mandate stage and hasn`t been processed yet, you can cancel it.
b) Open Your UPI App Open the UPI app such as PhonePe, Google Pay, or Paytm and check for any pending mandate connected to your IPO application.
c) Cancel the Mandate Most UPI apps let you cancel a pending mandate. When you cancel the mandate, the IPO application gets withdrawn automatically, and no money will be taken from your account.
3. Canceling Through the R-WAP Portal (for retail investors in India)If you submitted your IPO application using the Retail Investor Web Application Platform (R-WAP), you can remove your application by logging into the platform and selecting the cancel option.
a) Login to R-WAP Visit the R-WAP website and log in using your credentials.
b) Select Your IPO Application Look for the IPO application you want to cancel. If it`s still within the allowed time period, there should be a way to cancel it.
c) Confirm Cancellation Click on the cancel button and confirm your action. This will automatically withdraw your application.
4. Contacting the RegistrarIn some cases, you might need to call the registrar responsible for the IPO to cancel your application, especially if it`s already being processed for allocation or the issue is close to ending. The registrar`s contact details are usually listed in the IPO prospectus, and you can get in touch with them by phone or email to ask for cancellation.
Important Things to Keep in Mind- Time Sensitivity: IPO applications can usually be canceled only during a certain period, typically before the IPO`s closing date. Once that period ends, your application might still be processed, and you could get shares. It`s important to act fast.
- Fees and Charges: Some brokers or platforms might ask for a small fee if you want to take back your IPO application. Be sure to look at the terms and conditions to find out if this applies.
- Allotment Process: If you are given shares, you can`t cancel your application after the shares have been assigned. The shares will be added to your account, and you`ll need to sell them on the secondary market if you decide not to keep them anymore.
- Multiple Applications: If you`ve submitted an IPO application through different platforms or brokers, you might need to cancel each application individually to prevent receiving more shares than you originally planned.
What Happens If You Don`t Cancel?If you don`t cancel your IPO application and the shares are allotted to you, you might have to accept them, and the money will be taken from your account. Even if you don`t want the shares, you`ll need to sell them in the market. If you don`t pay or withdraw after the shares are allotted, it could harm your credit score or your relationship with your broker.
ConclusionCanceling an IPO application is simple as long as you do it before the deadline. If you decided not to go ahead with the investment, faced some financial issues, or made an error in your application, there are clear steps to cancel. The key is to act fast and stay aware of the time limits to make sure your request is handled properly.
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Posted on: 29-Oct-2025 | Posted by: NIFM |
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