IPO Allotment Tips

IPO Allotment Process

During an initial public offering (IPO), the IPO allotment process is used to allocate shares to investors. It involves a random selection process where shares are allotted based on various factors such as the number of shares applied for, investor category, and the company's discretion. The process ensures fair and transparent distribution of shares.

How to increase chances for IPO Allotment

To increase chances for IPO allotment, one can apply for the maximum number of shares within retail limits across eligible accounts, invest thoughtfully, and use multiple demat accounts with different categories such as retail and HNI where permitted.

Step 1. Apply in more than 1 account for the same IPO

Applying with a maximum bid in a single account is not recommended for highly subscribed issues. Instead, use multiple eligible accounts for the subscription to increase the chances of getting allotted shares. Multiple accounts can improve chances of allotment, particularly for oversubscribed IPOs with good listing gains.

Step 2. Go for minimum bids, No big applications

In accordance with SEBI regulations, retail investors are entitled to receive an allotment of at least the minimum number of shares in all bids, from minimum to maximum. We advise opting for the minimum bid. In the case of oversubscribed IPOs, it is recommended to use multiple accounts for minimum bids, enabling investment in multiple IPOs with spare funds.

Step 3. Apply with different application numbers

To increase the chances of IPO allotment in cases of high retail subscription, it is recommended to apply with different application numbers. It is advisable not to use consecutive numbers, as it may reduce the likelihood of allotment through a lottery system.

Step 4. Select cut-off price / higher price band

While applying for an IPO, those who apply with the higher price band, also known as the cut-off price, have a greater chance of allotment. We suggest applying at the cut-off price for oversubscribed IPOs in which you desire an allotment.

Step 5. No last-moment subscription

If you intend to apply for an IPO, it is advisable to do so on the first or second day to avoid potential issues that may arise on the last day, such as bank systems being unresponsive due to high HNI and QIB subscription.

Step 6. Fill in the details properly

It is important not to rush when filling out IPO forms. Take the time to fill in all details correctly, including the amount, name, DP ID, bank details, and more. ASBA can be used through your bank, but it is crucial to verify details before applying to avoid technical rejection. Review IPO-related information such as price band, company financials, grey market premium, and more before applying. Invest in IPOs that are likely to provide listing and long-term gains based on your own research.