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Why I didn't get IPO allotment?

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Key reasons for not getting an IPO allotment are:

  1. IPO oversubscription and allotment is done through a lottery
  2. Application rejected due to mismatch/incomplete information
  3. The issue price is higher than the bid price

Let's discuss them in detail:

  1. IPO Oversubscription

    Based on demand and supply, it is possible an IPO oversubscribed (received more bids than the available shares for the public).

    Here are the two cases of oversubscription to allocate shares.

    • IPO Received Huge Oversubscription

      In a big oversubscription case where the issue is heavily subscribed, the shares will be distributed on the basis of a computerized lottery. Each applicant has an equal chance to get allotment.

      For example, a company has 20,000 lot size to offer to the retail investors. And, the application received till the closing date is 1 lakh lot, which is 5 times than the offered lots. In this case, every 1 out of 5 applicants will receive the allotment. So, this can be the case of not getting an IPO allotment.

      Read the report of Top 10 IPO by Subscription

    • Small Oversubscription Scenario
    • According to SEBI, an investor cannot receive less than one lot in an IPO allotment. So, 1 lot is allocated to all the applicants. And, the remaining lots are distributed proportionally among investors who have applied for more than a lot. So, if 6000 investors applied for 9000 lots, a minimum of 1 lot will be allocated to each investor and the remaining 3000 lots will be proportionally allocated to those who have applied for more than a lot.

  2. Application Rejected

    Your IPO application can be rejected by the registrar of the IPO for multiple reasons. Some of the common reasons include:

    • Multiple IPO application and in the same IPO using the same PAN Number. Note that only 1 application is allowed per person in an IPO.
    • Filled invalid information in IPO application including PAN Number.
  3. Final Issue Price is higher than bid Price

    Book Building IPOs require investors to bid not only for lots but also for the price within the price band declared by the company. If you have submitted an application to bid for the price which is lower than the Issue price, then you will not get the IPO allotment.

    It is advisable to retail investors to bid on the cut-off price to increase chances of getting IPO allotment. Selecting the cut-off price means that you're agreeing to pay the price decided by the company at the end of the book building process. The price still remains in the range of IPO.

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More IPO Allotment Questions...

  1. How many days it usually takes to get an allotment of an IPO?
  2. Will the share be deposit to my account when the allotment status shown?
  3. Why do I get redirected to other websites to when I click 'XYZ IPO Allotment Status' link?
  4. When I check allotment status on your website it shows x amount of shares allocated to me, but I don't see them in my Demat account. Why is it so?
  5. How can I get confirm allotment?
  6. What is the formula for shares allotment in an IPO?
  7. How do I know the allotment status of shares I applied in an IPO?
  8. I apply for every IPO, but get allotment from some IPOs. Good IPOs don't get alloted to me. Where's the problem?
  9. How to know whether I have been allotted shares and amount refunded?
  10. How to know the allotment status of old IPOs?
  11. I have allotted one lot of shares in an IPO. Now, what to do next?
  12. I apply for an IPO on first day of issue, morning time on cut-off rate but most of the time I am not allotted shares. Please guide me, what to do, what to follow?
  13. Is there any advantage for RII (retail investors) if he applies for maximum permissible no. of lots rather than minimum no. of lots in a single application in case of a highly oversubscribed IPO?
  14. Does applying for IPO at upper price band stands more chance of allotment than lower price band?
  15. Does IPO gets allocated to people who apply first?
  16. I am receiving emails and sms of allotment and application made through ASBA even though i have never applied for such IPO? How and where to track such application and lodge complaint?
  17. How IPO allotment happens for NII category if it's oversubscribed?
  18. Why I haven't got allotment in most of the IPO's?
  19. If my fund is blocked in the account, does it mean I will surely get the IPO allotment?
  20. Even if a retail investor applies for Rs 2 Lakhs, allotment is limited to only one lot. Why is it that way?
  21. Why I didn't get IPO allotment?
  22. How to get Confirmed IPO Allotment?
  23. What Happens when an IPO is oversubscribed in India?

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