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Market Intelligence › Basic Terminologies
The whole path of the application money, and the common reasons a mandate fails
Published by The Retail Trader · AUG 04, 2026 · Market Basics
When you apply for an IPO, the money is not deducted from your account, it is blocked. This small difference is the whole point of ASBA, and because of it the need for something like a refund has almost disappeared.
ASBA stands for Application Supported by Blocked Amount. That amount gets locked in your bank account, but it stays in your own account. If you get an allotment it is debited, and if you do not, the block is lifted.
For retail this now usually happens through a UPI mandate. The broker sends the application, a mandate request arrives on your UPI app, and the amount is blocked only when you approve it.
Most rejections come from these reasons:
• The mandate was not approved by the cutoff time.
• The account had less balance than the blocked amount.
• The UPI ID was not in the broker's supported bank list.
• More than one application went through on the same PAN.
Once you approve the mandate, that money cannot be used until allotment, even though it is visible. If you have an important payment due that same week, size the application accordingly — blocked money is still blocked.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no guaranteed-return claim, and is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.