What is IPO allotment and how to check IPO allotment status?

What is an IPO Allotment?

IPO allotment is a process of systematically distributing shares to investors and traders who apply for them during an Initial Public Offering (IPO). During the allotment process, the available shares are allocated among interested investors in the quantity they have applied for. Demand, IPO subscription levels, and investor categories are all important considerations during the allocation process.

In the event that an IPO is undersubscribed in each investor group, eligible investors will get a full allocation. In oversubscribed initial public offerings (IPOs), investors have an equal opportunity to receive shares through a lottery-based allotment process.

 

How to Check IPO Allotment Status Online?

The registrar announces the IPO allotment status following the 3–4 days of the IPO bidding period. To check IPO allotment status, investors and traders can follow these steps:

• Visit the Registrar's Website: The registrar updates the allotment status online on its official website.
• Locate the IPO Allotment Status Section: Look for the section specifically dedicated to "IPO Allotment Status."
• Enter PAN and IPO Application Number: Provide essential details such as your PAN Card number, IPO Application Number, or Demat Account Number.
• Check Allotment Status: Once you enter the necessary information, the website will display your IPO allotment status, indicating whether you have been allocated shares or not.

 

Fundamentals of IPO Allotment Process Investors Must Know

When launching an initial public offering (IPO), corporations adhere to a number of basic procedures. The most important of these is IPO allocation. Investors must understand the fundamentals of the IPO allotment process, which follows:

• Release of IPO Documents: The company proposing the initial public offering (IPO) offers the necessary paperwork for the offering in the form of documents.
• Book-building Period: Prospective investors have the opportunity to review the IPO materials and submit their applications to purchase shares during the book-building phase.
• Adjustments Based on Demand: The company can adjust the number of shares it issues in response to investor demand.
• Announcement of Share Sale: The company reveals the details of the initial public offering (IPO), including the amount of shares to be sold and the brokerage houses that will be involved.
• Trading Phase: The trading phase of an initial public offering (IPO) begins once the book-building period ends and investors are able to purchase and sell shares through their brokers at market rates.

 

Important Aspects of IPO Allotment

In an initial public offering, the registrar is in charge of allocating shares to investors, handling refunds, and transferring allotted shares to investors' demat accounts. Some interesting aspects of IPO allotment include:

• Pro-Rata Allotment: When there are more applicants than shares available, the remaining shares are distributed fairly among the investors according to their bid amounts using a pro-rata allocation method.
• Lottery System: A lottery system in which all investors have an equal chance of acquiring shares can be used in oversubscribed initial public offerings (IPOs).
• Retail Investor Focus: To ensure broader participation in initial public offerings (IPOs) and to provide individual investors with a chance to participate, retail investors are typically given a minimum bid lot initially.
• Basis of Allotment: An essential document for guaranteeing transparency in the allotment process, the basis of allotment details how shares are distributed among various investor categories according to demand and subscription levels.

 

Application Form Entities

Here's a list of the entities that are included in an IPO application form:

• Allotment Application Form: In this form, you must mention your name, gender, birth date, permanent address, and contact details.
• Customer Details: Fill out this form by providing your name, address, nationality, CIN number, PAN, and age.
• Agent Details: This application form must be filled out by a broker or someone who wants to register with the DP by providing PAN, mobile, and email, among other details.

 

Conclusion

Investors who want to participate in new offerings must grasp how IPO allotment works. Investors can maximize their returns and participate in the growth of promising firms by following the allotment process. Investors can also have a better chance of profiting from early-stage firms' development potential.