FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
|
asked
Key reasons for not getting an IPO allotment are:
Let's discuss them in detail:
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.
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
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.
Your IPO application can be rejected by the registrar of the IPO for multiple reasons. Some of the common reasons include:
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.
List of all questions Ask your question
List of all questions Ask your question
FREE Intraday Trading (Eq, F&O)
Flat ₹20 Per Trade in F&O
|