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By IPOCheckr Editorial TeamLast reviewed
No method guarantees an IPO allotment. In an oversubscribed retail category, allotment is decided by a computerised draw of lots among valid applications, and each selected applicant usually gets one lot. What you can control is whether your application is valid and how many genuine, separate applications your household makes. Bid at the cut-off price, use your own PAN, demat and bank account, approve the UPI mandate well before the deadline, and use a shareholder or employee quota only if you are genuinely eligible.
Anyone promising guaranteed allotment for a fee is misleading you.
Most ‘not allotted’ results that could have been avoided were invalid or unapproved applications.
In oversubscribed retail, bidding for more lots does not improve your chance of being selected.
Each eligible family member with their own PAN, demat and bank account is a separate application.
SEBI's ICDR Regulations require that every allotted retail applicant gets at least one minimum bid lot, subject to availability. When there are more valid retail applications than available lots, the registrar, with the designated stock exchange, runs a computerised draw of lots to pick which applications get one lot. Leftover shares, if any, are then allotted proportionately.
Because the selection is among applications, not among lots, an application for one lot and an application for thirteen lots have the same chance of being picked in a heavily oversubscribed issue. The larger application simply blocks more money.
Suppose the retail portion has 10,50,000 shares and the lot is 50 shares, so 21,000 lots are available. After rejections, there are 8,40,000 valid retail applications.
None of these changes the draw itself. They make sure your application reaches it.
A spouse, parent or adult child can apply in their own name with their own PAN, their own demat account and a bank account or UPI ID that belongs to them. That is a separate application with its own chance in the draw.
What does not work: applying through a family member's demat account with your UPI, or the reverse. The name and PAN on the demat account must match the applicant, and the bank account behind the UPI ID must be the applicant's.
Applications for minors and joint accounts follow specific rules set out in the RHP's bidding instructions; read them before using such accounts.
When an IPO company is the subsidiary of a listed company, it may reserve up to 10% of the issue for that listed company's shareholders. If you held the parent's shares on the cut-off date in the RHP, you can apply in the shareholder quota and, as a retail shareholder, also in the retail category – two separate chances.
Similarly, eligible employees can apply in an employee quota as well as in the retail category.
Do not buy a parent company's shares only to get into a future quota. The cut-off date may already have passed, the quota may not be offered, and you take on the price risk of the parent's shares regardless.
Investors bidding above ₹2 lakh up to ₹10 lakh fall into the small non-institutional (sHNI) sub-category. Each selected applicant gets the minimum application size – the smallest number of lots above ₹2 lakh – and selection is again by draw of lots when demand is high. The odds depend on that sub-category's subscription, which can be very different from retail. Note that NII bids cannot be at cut-off, and cannot be withdrawn or lowered.
These are common myths, or worse.
Primary rules and official pages this guide was checked against. Rules change, so the official text always prevails.
General information, not investment advice. Rules set by SEBI, RBI and the exchanges can change, so confirm current limits with your broker or the offer document.