 # Does splitting funds in two HNI IPO applications increase allotment chances?

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Splitting the funds into two HNI IPO applications in an IPO does increase the chance of getting 2 lots but it also increases the chance of getting 0 lots. You could choose this strategy if you like the higher chance of getting 1 lot rather than increased chances of getting 2 lots.

Below is a calculation posted by our IPO forum member IPOLogic to support the above view:

### Example 1

• IPO Oversubscription (Expected): 100 times
• Available Funds for 120 Lots
1. You split the money in 2 accounts with 60 lots each. So, individual oversubscription factor = 60/100 = 0.6
Chances of getting 0 lot: = (1-0.6) * (1-0.6) = 0.16 = 16%
ii. Chances of getting 1 lot: = (0.6) * (1-0.6) + (1 - 0.6) * (0.6) = 0.48 = 48%
iii Chances of getting 2 lot: = (0.6) * (0.6) = 0.36 = 36%
iv Chances of getting at least 1 lot = 1 - 16% = 84%
2. You don't split the money. So, individual oversubscription factor = 120/100 = 1.2 lot
You will 100% chance of getting 1.2 lot
ii chances of getting at least 1 lot = 100%

### Example 2

• IPO Oversubscription (Expected): 100 times
• Available Funds for 30 Lots
1. You split the money in 2 accounts with 15 lots each. So, individual oversubscription factor = 15/100 = 0.15
chances of getting 0 lot: = (1-0.15) * (1-0.15) = 0.7225 = 72.25%
ii. chances of getting 1 lot: = (0.15) * (1-0.15) + (1 - 0.15) * (0.15) = 0.255 = 25.50%
iii chances of getting 2 lot: = (0.15) * (0.15) = 0.0225 = 2.25%
iv chances of getting at least 1 lot = 1 - 72.25% = 27.75%

You don't split the money. So, individual oversubscription factor = 30/100 = 0.3 lot
i. chances of getting 0 lot: = (1 - 0.30) = 70 %
ii. chances of getting 1 lot: = 0.30 = 30%
iii chances of getting 2 lot: = 0%
iv chances of getting at least 1 lot = 1 - 70% = 30%

So, if you want some chance to have 2 lots, then it increases your chance of getting 0 lots.

Thus, it will decrease the chance of getting at least 1 lot too.  