How to increase chances of IPO allotment?

IPO Allotment Tips

Apply in the name of several family members, apply by the deadline, and bid on as many lots as you can to increase your chances of IPO allotment. Other fundamental pointers include:

 

1. Apply Single Lot

Applying for a single lot is a good way to boost your chances of getting an allotment in an initial public offering. A percentage of an initial public offering (IPO) is usually set aside specifically for smaller retail investors, giving them an advantage in the allocation process. You can increase your chances of getting shares by applying for just one lot.

 

2. Utilize Multiple Demat Accounts

You can increase your chances of allotment by applying numerous times with multiple demat accounts. Investors can apply for a demat account in the name of several family members. This increases your chances of getting an IPO allotment. Nevertheless, it is crucial to reveal all demat account information when applying in order to meet regulatory obligations.

 

3. Pick Cut-off Price during the IPO Application

Investors are often given a range of prices to bid on in initial public offerings. The cut-off price might be a strategic move, as it is the highest price in the band. Shares are usually distributed proportionally if an issue is oversubscribed, with higher bidders given precedence over lower ones. This strategy can improve your allotment possibilities.

 

4. Avoid the Last Moment Rush

The number of rush IPO applications tends to spike in the hours leading up to the deadline. Sending in your application far in advance will help you avoid long wait times caused by system overload or technological difficulties. Submitting at the last minute increases the likelihood of errors or rejections, which in turn lowers your chances of allocation.

 

5. Staying away from Technical Rejections

Technical issues can make the IPO allotment procedure a major obstacle. A lack of cash in the associated bank account, an incorrect or incomplete application form, or a demat account that does not match the facts provided are common causes of rejection. To avoid these problems and disqualification, make sure you examine and recheck your application thoroughly before submission.

 

6. Purchase Parent Company Shares

If the initial public offering (IPO) is being conducted by a subsidiary or other division inside a bigger business group, owning shares in the parent firm could occasionally improve your chances of being allocated. In order to show appreciation for their long-term dedication and loyalty, several companies provide preference to the allotment to current owners. To find out if you qualify for this preferred allocation, you must read the IPO prospectus.

 

Conclusion

Securing an allotment in the extremely competitive IPO market demands a deliberate and knowledgeable strategy. To improve your odds of success, try applying for individual lots, using numerous demat accounts, and bidding at the cut-off price. You may also be eligible for preferential treatment during allotment if you own shares in the parent firm.