By ipomarket.in Editorial Team · Last reviewed: 2026-09-10
Disclaimer: This article is for informational purposes only and does not constitute investment advice. IPO investments are subject to market risks. Please read the offer document carefully and consult a SEBI-registered investment advisor before investing.
An IPO that fills the headlines one week can vanish from the calendar the next. For retail investors who have blocked funds through ASBA or lined up an application, a withdrawal or postponement is confusing and, at times, unsettling. This explainer walks through the confirmed reasons companies pull or delay their public issues in India, uses real examples from 2025 and 2026, and separates what regulation actually requires from what companies choose to disclose.
Two ways an IPO can be pulled: active vs passive withdrawal
There are broadly two routes by which an IPO comes off the table.
An active withdrawal is a deliberate decision. The company, usually in consultation with its bankers and advisors, cancels or defers the issue before it is finalised or before subscription opens. This is typically linked to unfavourable market conditions, weak investor demand, or concerns about the valuation the market is willing to pay.
A passive withdrawal happens by default. If the company fails to complete the IPO process within the regulatory timeline, for instance not listing within the stipulated period after filing offer documents, the application simply lapses. No dramatic announcement is needed; the approval expires.
This distinction matters. An active withdrawal is a choice made under pressure. A passive lapse often signals strategic drift, where the company holds an approval but never pulls the trigger.
The 90% subscription rule: the hard regulatory floor
The clearest, non-negotiable reason an IPO fails is the minimum subscription threshold under SEBI's ICDR Regulations (Issue of Capital and Disclosure Requirements, 2018).
A listing-bound issue must receive at least 90% subscription to be considered successful. If the book does not reach that level by the close of the subscription window, the issue cannot proceed and must be withdrawn, with application money refunded to investors.
The recent example is stark. Phytochem Remedies, an SME-board issue, was reportedly booked only 0.57 times, that is 57%, across its three-day window in December 2025, well short of the 90% floor. The company's chairman cited unfavourable market conditions and volatility in the capital markets in its regulatory filing. Whatever the stated reason, the arithmetic was decisive: without 90% coverage, there was no way forward.
For investors, a subscription figure trailing well below full coverage on the retail, NII, and QIB books is the loudest early warning. If you want to understand how those categories work, see our explainer on IPO subscription status: QIB, NII and retail explained.
Market conditions and investor sentiment
The most commonly cited reason in withdrawal notices is "unfavourable market conditions" or volatility. This is genuine in many cases: when broad indices are choppy and appetite for new paper dries up, even a fundamentally sound company can struggle to attract the price it wants.
A word of caution here. "Market conditions" is also a convenient umbrella. It can mask valuation disagreements, weak demand from institutional investors, or an issue simply priced above what buyers will accept. When you see this phrase, treat it as a starting point for questions rather than a full explanation.
Internal and strategic factors: the OYO case
Sometimes the trigger sits inside the company or with its large shareholders rather than in the wider market.
OYO is the standout example of repeated postponement:
- Its first IPO application, filed in October 2021, was reportedly returned by SEBI in January 2023.
- A second attempt was withdrawn in May 2024, reportedly citing weak conditions and a pending funding round.
- A third attempt was reportedly delayed again in May 2025, linked to market volatility and SoftBank's push for stronger earnings, with the target shifting to 2026.
Media reports have suggested a possible raise of up to US$800 million at a valuation of roughly US$7-8 billion, though these figures are unconfirmed and have shifted over time. The takeaway for investors is that when a major backer such as a private-equity or venture investor pushes for better earnings before a listing, a postponement can reflect timing discipline rather than a broken business. Watch for a re-filing rather than assuming the story is over.
Regulatory hurdles and pending investigations
Disclosure gaps, legal clarifications, or objections from SEBI or the exchanges can force a company to defer or withdraw.
Two cases illustrate this:
- NSE (National Stock Exchange): Its listing plans stalled for nearly a decade, tied up in the co-location and high-frequency trading controversy. As of September 2026, the exchange has moved forward, with its offering reportedly structured entirely as an offer for sale (OFS) of up to 148.9 million shares, around 6% of paid-up capital. Because it is a pure OFS, proceeds flow to selling shareholders, not the exchange. One September 2026 report suggested the issue may shrink to roughly ₹25,000-27,000 crore as investors pulled back from the OFS. These figures are from press reports and should be verified against official filings.
- Anand Rathi Wealth: The company reportedly cited difficult market conditions for its withdrawal, but sources suggested SEBI was reluctant to clear it due to a pending investigation linked to the NSEL matter. This is a reported claim, not a confirmed regulatory statement.
The lesson: when a well-known name withdraws, dig into its governance and compliance history rather than accepting the market-conditions line at face value. Reading the offer document helps; our guide on what a DRHP is and how to read it is a useful starting point.
Macro and pandemic-era postponements
External shocks can delay even the largest issues. The government postponed LIC's IPO, expected to be India's biggest at the time, due to market conditions amid the Covid-19 pandemic in 2021. LIC eventually listed in May 2022 once conditions stabilised. This is a clean example of a delay driven purely by timing, not by the underlying business.
SEBI's 2026 relief measures
Recognising market stress, SEBI introduced flexibility in 2026 that reduces the pressure to withdraw:
- SEBI reportedly extended the validity of observation letters until 30 September 2026, a one-time extension covering around 13 mainboard IPO candidates nearing their launch deadline.
- Companies were reportedly allowed to adjust their fresh-issue size by up to 50%, either up or down, without refiling the draft red herring prospectus.
These measures give issuers room to wait out a weak patch rather than let an approval lapse or scrap the plan entirely. They also explain why some approvals get extended rather than abandoned. Please verify the exact scope and dates of these measures against SEBI's official circulars, as the details here come from secondary reporting.
When approvals simply expire
Not every withdrawal is announced. Reports indicate that 23 companies allowed their SEBI approval to expire without launching, a form of passive withdrawal. The year is unclear from the source. When a company holds a valid approval but never launches, it often signals internal uncertainty, a decision to seek private funding instead, or a wait for better pricing.
What investors should infer
Here is how to read the common signals:
- Subscription below 90%: A hard stop. Weak demand usually points to a valuation mismatch or poor sentiment.
- Regulatory delays or objections: Do deeper due diligence on governance and any pending investigations.
- "Market volatility" cited: Treat as a partial explanation. Sentiment is weak; the same company may return in a stronger tape.
- Backer-driven postponement (as with OYO): Fundamentals may be intact; the issue is timing. Watch for a re-filing.
- Approval allowed to lapse: Strategic ambiguity. The company may re-file or pivot to private capital.
Against this, remember the bigger picture. Between 2020 and 2025, Indian companies reportedly raised around ₹5,390 billion through public listings, more than the entire 2000-2020 stretch, with roughly half the number of issues. A busy market naturally produces both blockbuster listings and shelved plans. Withdrawals are part of a functioning market, not a sign it is broken.
If you are tracking issues that are still live, our upcoming IPOs list for 2026 is updated as filings and dates change.
FAQ
What is the minimum subscription an IPO needs to go ahead?
Under SEBI's ICDR Regulations, an IPO must receive at least 90% subscription to be considered successful. If the book does not reach that level by the close of the subscription window, the issue is withdrawn and application money is refunded.
Does a withdrawn IPO mean the company is in trouble?
Not necessarily. Some withdrawals reflect weak demand or valuation concerns, but others are purely about timing, such as LIC's pandemic-era postponement or OYO's repeated delays linked to its backer's earnings expectations. The reason stated matters, and it is worth checking the company's regulatory history rather than assuming the worst.
What is the difference between active and passive withdrawal?
An active withdrawal is a deliberate decision to cancel or defer the issue, usually before subscription opens. A passive withdrawal happens when the company fails to complete the process within the regulatory timeline and the application lapses automatically.
Will I get my money back if an IPO is withdrawn after I apply?
Yes. If an issue is withdrawn or fails to meet minimum subscription, application money blocked through ASBA is released or refunded. Because ASBA only blocks funds rather than debiting them upfront, the amount stays in your account and the block is lifted.
Do SEBI's 2026 relief measures reduce withdrawals?
They are designed to. By extending the validity of observation letters and allowing issue-size adjustments without refiling, SEBI gives companies room to wait out weak conditions rather than scrap plans. The exact scope should be confirmed against SEBI's official circulars.
Last reviewed: 2026-09-10 by the ipomarket.in Editorial Team.