Does IPO get allocated to people who apply first?
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- Updated On:24-Feb-2021
- Replies:1
Short Answer
No, IPO allotment doesn't work like that. It is not dependent on who applied first, rather it is based on the total issue demand. There isn't a formula but a set process based on which the shares get allotted to different category of applicants.
Detailed Answer
No, IPO doesn't get allocated based on a first-come, first-serve basis. The allotment of shares in case of an IPO depends on the interest of the potential investors. If a lot of investors show interest in any particular IPO, then the allocation of shares to the retail investors is done through a lottery.
On the other hand, if there is less interest among investors to buy an IPO, then one can get all the shares applied for. If the demand is high, then the allocation of shares among retail investors done by dividing the total number of shares available in the retail quota divided by the minimum lot size.
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IPOs can be a good option for beginners as they provide an opportunity to get the shares of good companies at an attractive price. Though IPOs can provide good listing gains and quick profits, good companies can help you to create massive wealth in the long term.
If you are a Zerodha customer, you can apply for IPO online through Zerodha Console (Zerodha Back-office). The process for applying an IPO process has been explained in detail above. Here are few other answers to important queries that you may want to learn.
Yes, you can apply for an IPO application under a minor or HUF's name, provided they have different PAN card numbers. Minors can open a Demat account with their parent’s PAN Card and bank account.
In an Initial Public Offering (IPO) a company sells its shares to investors in order to raise money. As a retail investor, you can apply for an IPO from the primary market in order to get the shares offered by the company. Once the shares get listed on the secondary market, you can sell your shares provided you have received an allotment in the primary issue.
IPO is alloted by following the pre-defined rule laid down by the SEBI. When an IPO is oversubscribed it gets allocated by considering the minimum lot size. If still not solved, then a computerized draw of lots is conducted.
IPO or Initial Public Offering is the process through which a private company goes public by offering its shares to the public for the first time.
Zerodha is India’s largest Stockbroker and has more than 3.4 million active clients. The DP ID is a unique 8 digit number that is used to identify your Stock Broker or any other Financial Institution. If you want to find your DP ID (Depository Participant) for any particular reason, follow the mentioned steps to get it easily.
The SEBI (Securities and Exchange Board of India) requires every IPO to get at least an overall 90% subscription to proceed to the allotment process. If an IPO fails to get a 90% overall subscription (including the QIB, NII, and Retail category) by the last day of the issue then the IPO is cancelled and the money collected from the investors is refunded back.
IPO's (Initial Public Offering) is very popular right now. Therefore getting an allotment is not easy. There are two different ways in which you can find out your allotment status. These are through the BSE India website and the company Registrar's website. Know the details and another bonus way of finding out allotment status here.
Subscribing for an IPO with multiple accounts, avoiding last-day applications, and choosing minimum bids are few ways to increase IPO allotment chances.