Letter of Regret for Non-Allotment, with Refund

4. Letter of Regret for Non-Allotment, with Refund

When it is written: whenever an application for shares cannot be allotted in full — because the issue is over-subscribed, or the company decides not to allot to a particular applicant at all — the Secretary writes a letter of regret, expressing regret that the company is unable to allot (fully or at all) and enclosing a refund of the application money not carried forward towards any allotment.

The statutory time-limit on refund [Section 39(3), Companies Act, 2013, read with the Companies (Prospectus and Allotment of Securities) Rules, 2014]: if the minimum subscription stated in the offer document is not received within the prescribed period (ordinarily 30 days from the date of issue of the prospectus), or if an application is otherwise rejected/not allotted, the application money must be repaid within 15 days of the closure of the issue (or of the decision not to allot). If the company fails to repay within this period, it becomes liable to repay the money with interest at 15% per annum from the expiry of the 15th day, and the directors responsible for the default may be held personally liable.

What the letter must state: a courteous expression of regret, whether the non-allotment is total or partial, the exact amount being refunded, and the mode of refund (cheque, demand draft, or direct credit/NEFT to the applicant's bank account, as the applicant's form specifies).

Specimen letter of regret with refund:

SAHYADRI TEXTILES LIMITED
Regd. Office: 88, Shivaji Nagar, Kolhapur - 416 003
CIN: L17110MH2010PLC201456

Ref. No. STL/CS/2025-26/213                                    Date: 14th July, 2025

To,
Mrs. Anita V. Chavan
12, Sadashiv Peth,
Satara - 415 001

Dear Madam,

Sub: Regret for Non-Allotment of Equity Shares

With reference to your application for 600 Equity Shares of Rs. 10 each of the Company, we regret to inform you that, owing to over-subscription of the issue, the Board of Directors has not been able to allot you any shares. …