IPO Allotment Process: The Complete Guide

Introduction

Investing in an Initial Public Offering (IPO) is an exciting opportunity, but the IPO allotment process can feel like a mystery to many investors. If you’ve ever wondered how shares are allocated or why you didn’t get the allotment you hoped for, you’re not alone. This guide is here to break it all down for you, step by step, so you can confidently approach the IPO allotment process.

What is IPO Allotment, and Why Does It Matter for Investors?

IPO allotment is the process of distributing shares to investors who apply during the IPO subscription period. Since many IPOs are oversubscribed, not everyone gets the shares they apply for, which makes understanding this process crucial for investors.

Why IPO Allotment is a Key Step in Your Investment Journey

For investors, allotment isn’t just about getting shares; it’s about gaining access to a company’s growth story from the beginning, especially if the stock is in high demand pre-IPO; it can multiply the initial investment substantially.. Understanding how IPO allotment works can help you manage your expectations and refine your investment strategy. 

What is the IPO Allotment Process?

Definition: What Does IPO Allotment Mean?  

Simply put, IPO allotment is the process by which shares are distributed to investors based on specific rules and the demand for the IPO. A registrar appointed by the company handles this process to ensure fairness and compliance.

How IPO Allotment Works for Different Types of Investors

Here’s how shares are allocated to various investor categories:

• Retail Investors (RIIs): A lottery system is used if there’s oversubscription, and if not oversubscribed then people get what they’ve applied  for.
• Non-Institutional Investors (NIIs): Allotment is proportional to the amount applied.
• Qualified Institutional Buyers (QIBs): A fixed percentage is reserved, and shares are allocated systematically.

Step-by-Step IPO Allotment Process

1. Submitting the IPO Application: The Starting Point

Investors apply for shares during the subscription window using:

• ASBA (Application Supported by Blocked Amount): Your funds are locked in until the IPO allotment process is finalized.
• UPI (Unified Payments Interface): A convenient option for retail investors.

2. Verification of IPO Applications

Once applications are submitted, the registrar verifies details like PAN, bank account information, and fund availability to ensure everything checks out. This step ensures only valid applications move forward in the IPO allotment process.

3. Share Allotment Based on Investor Categories

• Retail Investors: Shares are allotted through a lottery system when demand exceeds supply. This ensures fairness when more applications are received than shares available.
• Non-Institutional Investors (NIIs): Proportional allotment ensures fairness based on application size, often favoring larger investors.
• Qualified Institutional Buyers (QIBs): Shares are allocated as per regulatory guidelines, ensuring their fixed percentage of shares is met.

4. Communication of IPO Allotment Status

Once the process is complete, you’ll receive updates via email, SMS, or by checking the registrar’s website. Knowing how to check IPO allotment status is crucial to confirm whether you’ve received shares.

5. Credit of Shares to the Demat Account

After allotment, shares are transferred to your Demat account a day or two before the listing date. This transfer’s timeline is essential for smooth trading once the stock is listed.

Also Read: How to Buy IPO? All You Need to Know

How to Check IPO Allotment Status

1. Checking IPO Status on Registrar Websites

Websites like Link Intime and KFintech allow you to check your IPO allotment status using your application number or PAN. These platforms are the most reliable for accurate information.

2. Using Stock Exchange Websites

Both NSE and BSE have dedicated portals where you can track your IPO application status. Knowing how to check IPO allotment status on these platforms is a useful skill for any investor.

3. Broker and Bank Portals for Application Status

Many brokers and banks provide integrated platforms that make it simple to track your IPO allotment status alongside your other investments. This is particularly helpful if you use their services for multiple applications.

Table: Comparison of Different Methods to Check IPO Status

Method	Ease of Use	Accuracy
Registrar Websites	High	High
Stock Exchange Portals	Medium	Medium
Broker/Bank Portals	High	High

IPO Allotment Date and Timeline: What to Expect

1. Key IPO Dates to Keep in Mind

The IPO allotment process typically takes 7-10 days after the subscription ends. Key milestones include:

• Closing Date: The last day to apply.
• IPO Allotment Date: When shares are allocated to investors.
• Listing Date: When shares start trading on the stock exchange.

2. How IPO Timelines Impact Investment Decisions

Knowing these dates helps you plan your funds and investment strategies effectively. It’s all about staying informed and prepared. Knowing the IPO allotment time is equally important to ensure you check updates promptly.

Reasons Why You May Not Get IPO Allotment

1. Oversubscription of IPO Shares

When demand exceeds supply, not all applications are successful—especially in high-demand IPOs. Oversubscription often leads to rejections or partial allotments.

2. Application Errors: Mistakes That Lead to Rejection

Errors like incorrect details or insufficient funds can result in application rejection. Always double-check your IPO application status to avoid surprises.

3. Insufficient Funds During the Blocking Process

If your account doesn’t have enough funds when the amount is blocked, your application may be rejected. This is a common yet preventable reason for failed IPO allotments.

Tips to Improve Your Chances of IPO Allotment

1. Apply at the Cut-Off Price

This increases your chances of allotment since it shows you’re willing to pay the highest price within the band.

2. Use Multiple Applications

Submitting applications under family members’ PANs can improve your odds—and ensure compliance with the rules.

3. Avoid Common Mistakes

Double-check all your details and ensure sufficient funds are in your account. Preventing errors can significantly improve your chances of success in the IPO allotment process.

Conclusion

Key Takeaways From the IPO Allotment Process

Understanding how the IPO allotment process works is essential for planning your investments and managing expectations. You can improve your chances of success by staying informed and avoiding common mistakes.

How Equentis RR Can Help You Maximize Your IPO Success

Equentis RR offers the tools to help you navigate the IPO allotment process confidently and make smarter investment decisions.

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