Initial Public Offerings, or simply IPOs, are a leading investment avenue for both retail and institutional investors.
An IPO, with the potential of listing gains and a long-term growth perspective, is often a much-desired event. One of the most awaited moments of an investor is to know if he has been allotted shares or not.
That brings us to the crucial steps of checking your IPO allotment status and understanding the process of IPO allotment. Here’s a step-by-step guide to make this process smooth for you.
What is IPO Allotment?
IPO allotment refers to the process by which shares are allotted to applicants who have applied for the same during the IPO subscription period. Depending upon the demand, the number of shares received by an investor may vary. For an oversubscribed IPO, not all applicants will receive shares since the demand exceeds the available supply.
IPO Allotment Process
Typically, the allotment process in an IPO is regulated by guidelines set by the Securities and Exchange Board of India, or SEBI. The process follows these steps:
Closure of Subscription: After the period for IPO allotment process subscription closes, the registrar of the IPO takes over. The registrar of the IPO is appointed by the issuing company.
Bid Verification: The registrar verifies all applications for the completeness of the application and that the funds are appropriately blocked in the applicant’s bank account, free of any discrepancies.
Basis of Allotment (BOA):
For retail investors, allotment is done proportionately or through lottery, in case of oversubscription.
Institutional investors may get allotment based on their subscription category.
Approval and Refunds: Once the basis of allotment is decided, shares are credited to the Demat accounts of successful applicants. At the same time, refunds or unblocking of funds are done for unsuccessful applicants.
Credit to Demat Account: Finally, allotted shares are transferred to investors’ open Demat account before the listing date.
How to Check IPO Allotment Status
After applying for an IPO, investors are all set to check their allotment status. Here are the steps to do so easily:
1. Visit the IPO Registrar’s Website
The registrar’s website is the main platform for checking your IPO allotment status.
- Go to the registrar’s official website (e.g., Link Intime, KFin Technologies).
- Look for the section labelled “IPO Allotment Status.”
- Select the specific IPO from the dropdown menu.
- Enter your application number, PAN, or DP ID/client ID.
- Submit the details to view your allotment status.
2. Check via the Stock Exchange Website
- Stock exchanges like BSE and NSE also provide IPO allotment status.
- Visit the BSE or NSE website.
- Navigate to the “Equity” section under the IPO status tab.
- Enter details such as your PAN, application number, and IPO name.
- Click “Search” to view the allotment results.
3. Using Your Broker’s Platform
Most brokerage sites have IPO facilities with allotment status updates. Log in to your trading account and look for the IPO section.
4. Via SMS or Email
The registrars send the allotment update through SMS or email to the registered contact details while applying for the IPO. You will receive a quick update if you have an eye on these notifications.
Key Factors Influencing IPO Allotment
Knowing the factors that determine the allotment of the IPO can increase your chance of getting allotment.
Oversubscription:
In situations where the retail category is oversubscribed, the allotment usually takes place through a computerized lottery system. In other words, if an IPO is oversubscribed by 10 times, only 10% of applicants will receive shares.
Application Size:
According to SEBI, retail investors applying for a minimum lot size are at par with those who apply for multiple lots.
Category Quotas:
IPOs have reserved quotas for different investor categories such as retail, institutional, and non-institutional investors.
Technical Rejections:
Incomplete or erroneous applications, insufficient funds, or discrepancies in the details provided can lead to rejection.
What to Do If You Don’t Receive Shares
Not receiving an IPO allotment can be disappointing, but there’s no reason to lose heart. Here’s what you can do:
- Track Refunds: Ensure that the amount held back in your account is freed up immediately. If not, reach out to the bank or registrar.
- Check Secondary Market: If you still want to invest in the stock, you can buy shares in the secondary market after listing. Prepare yourself for price movements.
- Track listings: Be aware of which IPOs are going to be listed and apply accordingly.
Tips for a Smooth IPO Application Process
- Apply Through Multiple Applications: Increase your chances by applying from multiple Demat accounts (owned by family members) following the legal guidelines.
- Ensure Sufficient Funds: Make sure that your account has sufficient funds to avoid rejections due to a short balance.
- Double-Check Details: Enter all application details accurately to avoid technical rejections.
- Apply Early: Submitting your application early may sometimes help in avoiding last-minute technical glitches.
Conclusion
It does not have to be complicated by tracking your IPO allotment status. With this process listed above, one can obtain whether he or she has been allotted some shares, thereby enhancing an understanding of the IPO allotment and staying informed concerning influencing factors that can facilitate a better all-around investment experience.
That is never the end after allotting shares; cautious post-listing strategies are similarly crucial as far as bringing home high returns is concerned.
