Initial Public Offerings (IPOs) attract massive interest from retail investors in India. However, with most IPOs being oversubscribed multiple times, getting an allotment often feels like a matter of luck. The good news is that while IPO allotment is largely lottery-based for retail investors, there are practical strategies that can help increase the chance of IPO allotment.
In this detailed guide, we explain what is an IPO, how the IPO allotment process works, and actionable tips that can genuinely improve your chances—especially for upcoming IPOs.
What Is an IPO?
An IPO (Initial Public Offering) is the process through which a private company offers its shares to the public for the first time and gets listed on a stock exchange. Investors can apply for IPO shares during the subscription period through their Demat and bank accounts.
IPOs allow retail investors to participate in a company’s growth journey at an early stage, often at attractive valuations.
How IPO Allotment Works in India
To understand how to increase chance of IPO allotment, you must first understand how shares are allocated.
For retail investors:
- IPO shares are allotted on a lottery basis
- One valid application = one chance
- Oversubscription increases competition
- Multiple applications from the same PAN are rejected
This means strategy matters more than investment size.
How to Increase Chance of IPO Allotment
Below are proven methods that can significantly improve your IPO allotment probability.
1. Apply for IPOs with Multiple Demat Accounts (Legally)
Each PAN is allowed one application, but different family members can apply using:
- Separate PAN cards
- Separate Demat accounts
- Separate bank accounts
This legally increases the household’s chances of allotment.
2. Always Apply at the Cut-Off Price
Applying at the cut-off price ensures:
- Your application remains valid even if the final issue price is fixed at the upper band
- No rejection due to pricing mismatch
This is one of the simplest ways to increase chance of IPO allotment.
3. Apply for One Lot Only
Many investors assume applying for more lots increases chances. In reality:
- One lot = one chance
- Ten lots = still one chance
Applying for one lot helps distribute your capital across multiple IPOs rather than locking it in a single issue.
4. Avoid Applying Through Multiple Brokers Using the Same PAN
Applying multiple times using the same PAN:
- Leads to complete rejection
- Reduces your credibility in the system
Stick to one clean application per PAN.
5. Choose IPOs with Lower Retail Oversubscription
Not all IPOs are equally crowded. To increase chance of IPO allotment:
- Track subscription data on Day 2 or Day 3
- Avoid IPOs with extremely high retail demand
- Focus on fundamentally strong but less hyped issues
6. Apply Early or Mid-Subscription Period
Although allotment is random:
- Applying early reduces technical glitches
- Avoids last-minute UPI mandate failures
This improves application success, which indirectly increases your chances.
7. Ensure Sufficient Bank Balance Until Allotment
UPI mandate failure is a common reason for rejection. Make sure:
- Funds are maintained until allotment finalization
- Auto-debit permissions are approved on time
8. Focus on Fundamentally Strong IPOs
Quality IPOs attract long-term investors, not just speculators. A SEBI-registered advisor can help evaluate:
- Company financials
- Valuation
- Industry outlook
This improves both allotment logic and post-listing returns.
9. Track Upcoming IPOs in Advance
Monitoring upcoming IPOs helps you:
- Prepare capital allocation
- Avoid overexposure
- Select IPOs strategically
Planning ahead always improves outcomes.
10. Avoid Grey Market Noise
Grey Market Premium (GMP) creates hype but does not guarantee allotment or listing gains. Focus on fundamentals rather than speculation.
Role of Financial Planning in IPO Investing
IPOs should be part of a broader investment strategy. Tools like a SIP calculator help investors:
- Compare IPO investing vs long-term SIP returns
- Allocate capital wisely
- Avoid emotional investing
IPOs should complement—not replace—systematic investing.
Common Mistakes That Reduce IPO Allotment Chances
- Applying with insufficient funds
- Ignoring UPI mandate approval
- Multiple applications using the same PAN
- Blindly following social media hype
- Investing without understanding what is an IPO
Avoiding these mistakes alone can significantly increase chance of IPO allotment.
Should You Apply for Every IPO?
No. Applying selectively with proper research is better than chasing every issue. A disciplined approach guided by a SEBI registered advisor helps balance risk and opportunity.
Final Thoughts
While IPO allotment is not fully in your control, following the right strategies can meaningfully increase chance of IPO allotment. From applying at the cut-off price to choosing less crowded IPOs and maintaining proper financial discipline, small actions make a big difference over time.
Smart IPO investing is about patience, planning, and consistency—not luck.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
Frequently Asked Questions (FAQs)
1. How to increase chance of IPO allotment?
Apply for one lot, choose cut-off price, ensure UPI mandate approval, and avoid multiple applications from the same PAN.
2. Does applying for more lots increase IPO allotment chances?
No, retail allotment is lottery-based. One lot and multiple lots carry the same probability.
3. What is an IPO?
An IPO is when a private company offers its shares to the public for the first time.
4. Can family members apply for the same IPO?
Yes, as long as each has a separate PAN, Demat account, and bank account.
5. Is IPO allotment guaranteed?
No, IPO allotment is not guaranteed, especially in oversubscribed issues.
6. Does applying early increase allotment chances?
It doesn’t affect lottery probability but reduces the risk of technical failure.
7. Should I apply at cut-off price?
Yes, applying at cut-off increases application validity.
8. Can a SEBI registered advisor help with IPOs?
Yes, a SEBI registered advisor can help evaluate IPO fundamentals and risks.
9. What happens if my UPI mandate fails?
Your IPO application is rejected automatically.
10. How do I track upcoming IPOs?
You can track upcoming IPOs through exchange websites, advisory platforms, and financial portals.
11. Is IPO investing better than SIP?
Both serve different purposes. SIPs focus on long-term wealth, while IPOs offer listing opportunities.
12. Can SIP calculator help in IPO planning?
Yes, it helps compare long-term returns versus short-term IPO investing.
13. What is retail investor category in IPO?
Retail investors apply for shares worth up to ₹2 lakh.
14. Does GMP affect allotment?
No, GMP only reflects market sentiment, not allotment probability.
15. Can I cancel IPO application after applying?
Yes, before allotment finalization.
16. Why do IPOs get oversubscribed?
Due to strong demand, limited shares, and market optimism.
17. Is IPO allotment random?
Yes, retail allotment follows a computerized lottery system.
18. Can I apply for IPO without Demat account?
No, a Demat account is mandatory.
19. Are IPOs risky?
Yes, IPOs carry market and business risks like any equity investment.
20. Should beginners invest in IPOs?
Beginners should start cautiously and seek guidance from a SEBI registered advisor.
