Almost every rejected IPO application is rejected for the same reason, and it is not a technical fault. It is the same person applying more than once. The rule is simple to state and easy to break by accident, so this is the mechanism, and where the exceptions are actually written down.
The key the registrar matches on is your PAN. Not your name, not your bank account, not your broker, and not your demat account. Everything below follows from that one fact.
One application per PAN in the offer. Submit two and the usual outcome is that both are rejected, not that one is kept and the other dropped. You do not get a warning, and you do not get to choose which survives. The registrar de-duplicates on PAN after the issue closes, and the rejected applications appear in the basis of allotment the exchange publishes.
So the first question people ask has an unwelcome answer. Applying in retail and in the HNI category on the same PAN is two applications by one person, and it is treated as exactly that. It does not give you two chances in two different pools. The size of your bid is what decides which category you land in, and it is decided for you: up to Rs 2 lakh is retail, above Rs 2 lakh is non-institutional. It is not a menu.
There is one exception that is real and it is the reason the question keeps coming up. Where an issue carves out a reserved portion, most often for eligible shareholders of the listed parent, and sometimes for employees, the offer document usually states that a bid in that reserved portion and a bid in the main offer are not treated as multiple applications. That is a genuine second entry, in a smaller and often less crowded pool. Two things about it. You have to actually be eligible, which for a shareholder quota means holding at least one share of the named company on the record date stated in the offer. And the permission is granted by the offer document, not by a general rule, so it is written in the red herring prospectus for that issue and it is worth reading there rather than assuming.
Now the lots. Applying for more than one lot in a single application is completely normal and is not a second application. What it buys you is the part that surprises people, and it depends on how oversubscribed the retail portion turns out to be.
Divide the shares reserved for retail by the minimum lot and you get the maximum number of retail applicants who can each receive one lot. If fewer people apply than that number, everyone gets at least their one lot, and what is left over is allotted in proportion to what people asked for. In that case asking for more lots does get you more shares.
If more people apply than that number, which is what "retail subscribed 8 times" means in practice, nobody can be given more than the minimum lot, and there are not enough minimum lots to go around. At that point it becomes a draw, and this is the bit worth knowing: one application is one entry, whether it asked for one lot or ten. A ten-lot application in a heavily oversubscribed issue has the same chance of receiving one lot as a one-lot application, with ten times the money blocked while it waits.
The draw itself is not a metaphor. The registrar runs a computerised lottery on the valid applications, and the result is published as the basis of allotment along with how many applications were received and how many were rejected. It is auditable after the fact, which is why the registrar and the exchange are the only places worth checking an allotment.
A few variations on the same PAN rule, because they all come up:
- Two demat accounts, one PAN, two applications: still one person, still rejected. The demat account is where shares are credited, not what identifies you.
- Two bank accounts or two UPI IDs, one PAN: same answer, for the same reason.
- Two applications through two different brokers: same answer again. The registrar never sees the broker.
- Two people in a family, each with their own PAN and their own demat account: two valid applications. This is the only way to hold more than one entry, and each application has to be funded from an account the applicant is entitled to operate.
- A joint demat account: the application belongs to the first holder, and it is that PAN which counts.
If your application is rejected, the money that was blocked is simply unblocked. It never left your account, so there is nothing to refund and no waiting for a cheque. The same is true if you apply validly and receive nothing.
One more rejection reason that has nothing to do with PAN and catches people every cycle: a bid below the final issue price. In a book-built issue the price is discovered from the bids, and a bid under the price finally set is not allotted anything. Retail investors can bid at cut-off, which means accepting whatever price is set inside the band, and that is what the option exists for.
Everything above is the general framework. The specifics that vary by issue, which portions are reserved, who counts as eligible, what the record date is, and what the minimum lot actually is, are stated in that issue's own offer document. We read those documents for every issue we track and cite each figure to its page, so the numbers for a given IPO are on its page here rather than in a general guide.