An IPO refund is the return of the money that was blocked or paid for an application that did not result in shares, or only in part. With ASBA and UPI, which is how nearly all applications are made now, no money actually leaves your account while the application is pending, so a refund is simply the unblocking of the held amount. If you are not allotted any shares, the full block is released. If you receive fewer shares than you applied for, only the proportionate amount is debited and the rest is released. If the final issue price is below the cap price at which you bid, the difference between the two for each allotted share is also released. Under SEBI timelines, unblocking has to be completed within the period set for allotment, which is currently three working days after the issue closes, and delays can attract compensation payable by the intermediary. If your funds stay blocked beyond this period, you should contact your bank, the registrar and the Self-Certified Syndicate Bank, and escalate through SEBI SCORES if needed.
Example: You bid at the cap of Rs 100 for 150 shares and Rs 15,000 is blocked. The final price is Rs 96 and you receive 150 shares. Rs 14,400 is debited and Rs 600 is released. Had you received nothing, the whole Rs 15,000 would be released.