What is the process of IPO allotment?

The IPO allotment process is allocation of shares to the IPO investors based on the availability of shares.

If an IPO is not fully subscribed, all the investors in an IPO receive full allotment.

If an IPO is oversubscribed, the allotment happens either on a proportionate basis or a lottery basis depending on the investor category and subscription level.

Few points to note in the process of allotment :

• Only valid, error-free applications submitted at the cut-off price or at a price higher than the issue price will be selected for allocation.
• Bids will not be uploaded to the exchange until the application amount is blocked in the account. Therefore, it is important to approve the UPI mandate for UPI applications within the cut-off period.
• If the number of retail/non-institutional investors is less than the maximum number of RII/NII allottees, each RII/NII will receive minimum bid lot and the remaining shares (if any) on a proportionate basis.
• If the number of retail and non-institutional investors exceeds the maximum number of RII/NII allottees, the allocation will be made by drawing lots.
• Allocation to QIBs and other reserved categories (if any) will be made on a pro rata basis.
• The under-subscription in one category (except QIB) will be adjusted by the surplus in another category.
• Basis of allocation will be finalized within three working days of the issue closure. 
• Credit of shares to the Demat account of the allottee will be done within five business days of the closing of the issue.

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