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IPO subscription reflects the number of shares and people bidding for IPO shares offered by a company.
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IPO subscription indicates demand for an IPO. The IPO subscription data shows the number of shares applied for by all investors during the IPO subscription period. This data is tracked across all investor categories and is available in real time.
The IPO subscription period is 3-10 business days, depending on the type of IPO. The live IPO subscription status is available on chittorgarh.com, BSE and NSE websites.
IPO subscription reflects the total number of public subscriptions in an IPO. It shows the demand for an IPO in terms of the number of shares based on applications received. The IPO subscription number changes throughout the IPO window and is finalized after the IPO bidding period closes.
How IPO subscription data helps investors?
The IPO subscription process is a way for investors to place bids for IPO shares. The following parties are involved in the IPO bidding process:
Steps of IPO Bidding Process
The IPO bid is made online on the platform provided by the stock exchanges (i.e. BSE, NSE) via stock broker or banks. The subscription process for the IPO begins on the opening day of the IPO and continues until the closing day of the IPO. While an investor can submit the online offer for shares at any time (24 hours), the broker/bank send it to the Exchange between 10:00 am and 05:00 pm. The following are the key steps involved in making a bid for IPO share offer:
The investor may submit the bid for the IPO shares to the stockbroker or the bank at any time as long as the public issue is open for bidding. The IPO bidding platform of the stock exchange is open from 10 am to 5 pm. Even if the bank/broker accepts the bids for 24 hours, the bids will only be submitted to the stock exchanges between 10 a.m. on the opening day of the IPO and 5 p.m. on the closing day of the IPO.
Time to submit the bid for IPO shares:
Note:
The service of placing bids for IPO shares is offered free of charge by stockbrokers and banks. When shares are allotted in an IPO, the broker may charge a brokerage fee and taxes when the investor sells the shares on the exchange.
Stock brokers/banks receive a small amount from the issuing company for processing the IPO application.
IPO investors are classified in three broad categories. Depending on the type of investor and the amount of investment, the investor can participate in an IPO through one of the below categories.
Note:
The IPO Subscription calculator helps you know the number of times an issue has been subscribed. To determine the IPO subscription rate, investors need the details of the shares offered per category and the bid numbers. Investors can find this information on the stock exchange's website.
Investors can also refer to IPO Subscription Live Figures on the Chittorgarh website.
Generally, investors do not calculate these numbers, as IPO subscription times can be easily found on the above websites. The calculation example below is used to understand the derivation of the IPO subscription rate.
Sula Vineyards came up with a public issue of 18,830,372 equity shares in Dec 2022.
| Category | Shares Offered | Amount (Rs Cr) | Size (%) | Shares Bid for | Subscription (times) |
|---|---|---|---|---|---|
|
QIB |
5,380,106 |
192.07 |
28.57% |
2,22,40,512 |
4.13x |
|
NII |
4,035,080 |
144.05 |
21.43% |
60,88,446 |
1.51x |
|
Ø Big NII |
2,690,053 |
96.03 |
14.29% |
45,39,066 |
1.69x |
|
Ø Small NII |
1,345,027 |
48.02 |
7.14% |
15,49,380 |
1.15x |
|
Retail |
9,415,186 |
336.12 |
50.00% |
1,55,07,996 |
1.65x |
|
Total |
18,830,372 |
672.24 |
100% |
4,38,36,954 |
2.33x |
Points to Note:
IPO subscription times indicate the demand for an IPO. IPO subscription type is based on the number of subscriptions to an IPO. If the IPO subscription time is greater than 1, the issue is considered oversubscribed; If it is less than 1, the issue is undersubscribed.
An IPO is divided into two main types:
An IPO in which the number of bids received in the form of shares is greater than the size of the issue is called oversubscribed. In other words, the demand for shares is greater than the supply of shares. In the above subscription table for the IPO of Sula Vineyards, the IPO is oversubscribed a total of 2.33 times.
The benefits of oversubscribed IPOs are as below
An undersubscribed IPO is an IPO in which the number of shares applied is less than the number of shares offered. An under subscription is when the demand is less than the supply.
For example, a company offers to issue 10 lakhs shares at Rs 90. However, the public applications received are for only 8 lakhs shares, the issue is said to be undersubscribed.
Subscription numbers for IPO shares help predict the share price once trading begins on exchanges after the IPO shares are listed. An oversubscribed IPO indicates higher demand for IPO shares, leading to a listing at a premium. However, in addition to demand, there are many other factors that influence the share price (see below):
Refer to the data on IPO Subscription vs Listing gain to get more idea on their relation.
Some IPO stocks are traded over-the-counter (unofficially) before they get listed on the stock exchanges. The premium at which they trade is called the grey market premium (GMP). The GMP indicates the premium over the issue price that investors are willing to pay for the IPO shares.
A higher GMP indicates higher demand for IPO shares, which leads to higher IPO subscription. Conversely, a lower GMP indicates low demand, leading to lower IPO subscription.
The IPO subscription reflects the number of times an issue has been subscribed. IPO subscription numbers are calculated for each category of investor and also on an overall basis.
For example, a company offers 10 lakh shares but has received applications for 50 lakh shares from the investors. In this case, the issue is subscribed 5 times (5x).
The subscription of the IPO is calculated based on the applications submitted by investors. The IPO subscription number indicates the demand for an IPO. It is determined by dividing the number of shares applied for by the number of shares offered.
Based on the applications received, the IPO may be undersubscribed or oversubscribed. If the demand for shares is greater than the shares offered, the issue is oversubscribed. If the demand for shares is less than those offered, the issue is undersubscribed.
The exchanges update the subscription status in real-time on their website based on the bids received.
You can access the IPO live subscription data online while the issue is open for subscription between 10am and 5pm. IPO subscription data is provided by the stock exchanges. Subscription numbers are constantly changing based on bids received by the exchanges and will be finalized at the close of the IPO.
You can access the IPO live subscription data online at any time. IPO subscription data is updated between 10:00 a.m. and 5:00 p.m. as long as the IPO is open for subscription.
Steps to check live IPO subscription status
Exchanges close bids for IPO shares at 5 p.m. on the issue closing date. They provide the bid data to the registrar for further processing. Once the registrar receives the data, it proceeds with the following activities:
The shares are then listed on the exchange and normal trading of the shares begins.
IPO subscription is calculated on real time basis by the exchanges (BSE and NSE) based on the bids received on their respective platforms during the IPO bidding session.
IPO subscription numbers are segregated into investor category-wise which shows the demand for an IPO by each investor category.
IPO subscription figures are calculated by dividing the total number of bids received in terms of the number of shares by the number of shares offered.
For example, a company offers 70,000 shares, of which 35,000 shares are offered to QIBs, 10,000 shares are offered to NIIs, and the remaining 25,000 shares are offered to RIIs.
The applications received against the above offer are 70,000 shares from QIB investors, 9,000 shares from NII and 30,000 shares from RII.
Thus, we can say that,
Overall, the IPO is said to be 1.55x times oversubscribed.
There is no rule of thumb or set procedure for obtaining a guaranteed allotment in an oversubscribed IPO.
You can follow some best practices to improve your chances of getting an oversubscribed IPO:
An oversubscribed IPO means that more applications have been received from investors than shares offered in an IPO. It shows that demand is greater than supply.
Example: A company offers 10 lakh shares in an IPO and receives bids for 30 lakh shares. In this case, the issue is considered to be three times oversubscribed.
It's very common for IPOs to be oversubscribed multiple times. Some IPOs are oversubscribed up to 600 times.
The oversubscription of an IPO depends on many factors:
Undersubscription means that the number of applications received is less than the number of shares offered in an IPO. Undersubscription indicates the demand for the shares is less than the supply.
For example, a company offers 10 lakh shares but has received applications for only 5 lakh shares. In this case, it is called an under-subscription.
If an issue is not fully subscribed, the company has the following options:
Undersubscription and oversubscription indicate the number of times an issue has been subscribed. The main differences between oversubscription and under subscription are explained below for a better understanding of the terms.
| Over Subscription | Under Subscription | |
|---|---|---|
|
Meaning |
The total number of bids received is more than the number of shares offered |
The total quantity of bids received is less than the number of shares offered. |
|
Demand |
The demand for shares is greater than the shares offered. |
The demand for shares is less than the shares offered. |
|
Allotment |
There is no guaranteed allotment in case of oversubscription. |
Investors receive guaranteed allotment in case of undersubscription. |
|
Minimum Subscription |
Minimum subscription levels are already met in an oversubscribed issue |
If the minimum subscription of 90% is not received, the issuer is obliged to refund the entire application money to investors. |
|
Company Performance |
This indicates good prospects as there is a higher demand for the shares. |
Indicates average performance or weak prospects considering lower demand for shares. |
For investors,
For companies,
If an IPO isn't fully subscribed or doesn't meet the minimum subscription criteria, the company may extend the deadline for closing the offering or reduce the OFS size. If this doesn't succeed, or if the company decides to cancel the IPO for other reasons, it may do so at any time.
Yes, investors can place a bid for IPO shares even after the market closes (except on the last day), provided the broker/bank allows them to place the order. Orders placed after market close will be forwarded to the exchange on the next business day.
Note that the IPO bidding platform of the Exchange is open from 10 am to 5 pm. Even if the broker/bank accepts your online IPO application outside the exchange's opening hours, the IPO application will not be submitted to the exchange until 10 a.m. the next day.
The NSE website displays live subscription data under the IPO tab in Market watch. Note that bids for mainboard IPOs are submitted on both the BSE and NSE IPO bidding platforms. The NSE website only displays the data of bids received on the platform in real time.
You can check the consolidated live IPO subscription status on Chittorgarh.com.
Steps to check the IPO subscription status on NSE
The IPO subscription period begins at 10 a.m. on the day the IPO opens for subscription and ends at 5:00 p.m. on the last day of the IPO.
Investors may subscribe for the IPO at any time during this window. Bids submitted after 5:00 p.m. (except on the last day) will be uploaded to the Exchange on the next business day. Some brokers and banks allow bids to be submitted only between 10 am to 5 pm.
The last day cut-off time for IPO application may vary from bank to bank and broker to broker. Therefore, check with your broker/bank for their respective closing times.
If the issue is more than 90% subscribed but not fully subscribed, all investors will receive the full allocation.
If the issue does not reach the minimum subscription level of 90%,
An under-subscription of shares occurs when an IPO receives fewer applications than shares offered.
For example, if a company offers 50,000 shares and receives applications only for 40,000 shares, it is under subscription.
In the case of under subscription, all investors receive the allotment. However, if the issue does not reach the minimum subscription rate of 90%, the issue is cancelled and the issuer refunds all money to the investors.
You can check the IPO subscription status on Chittorgarh.com.
IPO Subscription is the number of times a public issue is subscribed at BSE and NSE. IPO subscription indicates the demand for an IPO.
If the IPO subscription times is more than 1, the issue is said to be oversubscribed. If the IPO subscription times is less than 1, the issue is said to be undersubscribed and if it is exactly 1, the issue is said to be fully subscribed.
When an IPO is fully subscribed, not all investors may receive an allotment.
The allotment in a fully subscribed or oversubscribed IPO is done on proportionate or lottery based on the level of oversubscription and investor category.
A fully subscribed IPO occurs when all offered shares are sold to investors. This is a good sign for an issuer whose IPO is attracting great interest from investors.
Total subscriptions are the total number of bids received from all investors in relation to the total number of shares offered in an IPO.
The IPO subscription status can either be oversubscribed or undersubscribed. If the total number of bids received is more than the number of shares offered, the IPO is said to be oversubscribed and vice versa.
The IPO subscription status changes throughout the IPO window and is finalized at the end of the offering period.
The minimum subscription for an IPO is the minimum number of shares that a company must sell by the end of the IPO period from the total issue size.
Under SEBI regulations, each company must receive applications for at least 90% of the issue size. If the issuer does not meet the minimum subscription of 90%, it must refund the entire application amount to investors.
An oversubscribed IPO is good because an oversubscription is a sign of a good IPO. Check our IPO Subscription vs Listing Gain report for more details.
In an oversubscribed IPO, the demand for the shares is greater than the number of shares offered.
Investors believe that the company has good prospects, and therefore, investor interest in the IPO is greater as everyone is eager to buy the company's shares.
In an oversubscribed IPO, the allotment to all investors is not guaranteed.
An oversubscribed IPO is an IPO for which more bids were received than shares offered.
The oversubscribed IPO indicates a high demand for the stock. This is a positive sign for the company, as many investors want to buy the IPO. Allotment in an oversubscribed IPO is not guaranteed.
If the IPO is oversubscribed, the allotment happens on a proportionate basis or a lottery basis based on the extent of the subscription and investor category.
If the number of investors is more than the maximum number of allottees, the allotment will be made on a lottery basis, else it will be done on a proportionate basis.
Learn more about allotment in the IPO Allotment Chapter.
Investors can check the IPO subscription status to know if an IPO is oversubscribed.
When the number of bid offers is more than the number of shares offered by the issuer, the issue is said to be oversubscribed. When the IPO subscription times is more than 1, the IPO is oversubscribed.
For example, if a company offers 10,000 shares and receives bids for 20,000 shares. The issue is considered 2x oversubscribed. (20,000/10,000). The IPO subscription is calculated both at the level of individual investor categories and on an aggregate basis.
When an IPO is oversubscribed, it is not certain that you will get multiple lots. Sometimes it is also difficult to get one lot.
If the number of investors is less than the maximum number of allottees, one lot is assured and then it is allocated proportionally.
However, if the number of investors is higher than the maximum number of allottees, one lot is not guaranteed either, because the allotment is then made on a lottery basis.
It is good to apply for one lot or a little more in an oversubscribed IPO.
It does not make sense to apply for larger amounts thinking you'll get more lots, because that would mean blocking larger amounts. On the other hand, it is best to place bids for smaller lots through different accounts of friends or relatives to increase your chances of getting an allotment.
If the company does not receive the minimum subscription of 90% of the total issue size by the close of the offering, the company must refund the entire subscription amount to investors.
All investors will receive the full allotment if the subscription is more than 90% but not fully subscribed.
IPO Subscription can be checked on Chittorgarh.com. To check the live subscription data during the offering period follow the below steps:
The investors can place a bid for IPO shares with any of the exchange (i.e. BSE or NSE). Each exchange also provides live IPO subscription status on their websites for the bids received by them.
Steps to check IPO subscription status BSE:
Steps to check IPO NSE subscription status:
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