An Initial Public Offering (IPO) gives people the opportunity to directly and actively participate in the common market with stocks of a particular firm that have been transferred from private to public domain. However, there are some cases in which an investor may wish to withdraw the application filed with the SEBI. Investors need to have some knowledge of the procedures and regulations for withdrawing an IPO application.
An IPO application can be withdrawn during the subscription period, which typically spans from the opening to the closing date. Retail investors, employees, and shareholders with bid values not exceeding ₹2 lakhs can withdraw their applications during this period. Nonetheless, the bidders in the categories of NII and QIB mostly do not have the freedom of bidding withdrawal or bid cancellation once they have decided.
The process for withdrawing an IPO application varies depending on the method used to apply:
Key Considerations
Occasionally, the investors that submitted IPO applications during the issue may want to withdraw their applications after the books have closed and before the allotment is made. As per SEBI regulations, retail investors can approach the registrar of the issue with a withdrawal request during such a period. A request must include details such as the application number, the applicant’s name as provided in the application, and the applicant’s signature. The registrar will then forward this request to the State Central Standing Bureau (SCSB) to unblock the application money.
Implications of Withdrawal
Moreover, withdrawing an IPO application is not very complex if it is carried out within the aforesaid time horizons and accompanied by necessary formalities as outlined by the respective banks or brokers for such arrangements. This indicates that investors should be aware of the policies of their intermediaries and ensure they adhere to the stipulated timelines when withdrawing their applications.