Here is a blog detail for you on IPO allotment in India
Have you ever wondered how IPO shares are allotted in India? Whether you are a retail investor, HNI or an institutional buyer, it is important to understand the IPO allotment process to make the right investment decision. This blog explains how ASBA application works
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Proportional allocation for high-net-worth individuals. Learn how to check your IPO allotment status, how to improve your chances of getting shares, and what happens after allotment. Stay ahead in the stock market with this comprehensive guide
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1. Categories of Investors
Retail Individual Investors (RII) – Investment up to ₹2 lakh
Non-Institutional Investors (NII) / HNIs – Investment above ₹2 lakh.
Qualified Institutional Buyers (QIBs) – Institutions like mutual funds, insurance companies, and foreign investors
Anchor Investors – Large institutional investors who get shares before the IPO opens for the public
2. Types of IPOs
Fixed Price IPO – The company fixes the price beforehand
Book Building IPO – Investors bid within a price range (e.g., ₹100-₹120), and the final price is determined based on demand.
3. IPO Allotment Process
For Retail Investors (RII)
1 Oversubscription vs. Undersubscription
- If undersubscribed, all applicants get full allotment
- If oversubscribed, shares are allotted via lottery (SEBI mandates that all retail investors should have an equal chance)
- A lot size (minimum shares per application) is defined, and shares are allotted in multiples of that
2 Example of Oversubscription
- IPO has 1 lakh shares for retail
- 10 lakh applications received
- A lottery system ensures each applicant gets a fair chance
For HNIs & NIIs
Shares are allotted on a pro-rata basis based on demand. Higher bids increase the chances of allocation
For QIBs
Shares are allotted discretionarily, but SEBI regulations ensure fair allocation
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4. Steps in the IPO Allotment Proces
1. Application through ASBA (Application Supported by Blocked Amount):
- Money remains in your bank account until allotment
2. Closing of IPO & Verification
- The subscription data is checked
3. Finalization of Basis of Allotment
- Lead managers & registrars decide allotment
4. Share Allotment & Refunds
- Successful applicants get shares in their Demat account
- Unsuccessful applicants get refunds
5. Listing on Stock Exchanges
- IPO shares start trading on NSE & BSE
5. How to Check IPO Allotment Status?
- Visit the Registrar’s Website (e.g., Link Intime, KFintech)
- Check on NSE/BSE websites
- Banks or brokers also provide updates
