IPO Allotment

Investments

Quick Definition

IPO Allotment is the process of allocating shares to investors who have applied for them in an Initial Public Offering (IPO).

Detailed Explanation

IPO Allotment happens after the IPO subscription period ends. If the IPO is oversubscribed, shares are allotted through a lottery system or proportionate basis.

Once allotted, shares are credited to the investor’s Demat Account and listed on stock exchanges like the National Stock Exchange and BSE Limited.

The entire process is regulated by the Securities and Exchange Board of India.

How IPO Allotment Works

  1. Investor applies for IPO
  2. IPO subscription closes
  3. Shares are allotted based on demand
  4. Shares credited to Demat account
  5. Listing on stock exchange

Types of Allotment

  • Full Allotment: Entire applied shares received
  • Partial Allotment: Only some shares received
  • No Allotment: No shares allotted (refund initiated)

Why IPO Allotment Matters

  • Determines whether investor gets shares
  • Impacts potential listing gains
  • Important for retail investors in oversubscribed IPOs

Example

"If an IPO is subscribed 10 times, not all applicants receive shares, and allotment is done via lottery."

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