What is under subscription and oversubscription of shares?

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Over Subscription Vs Under Subscription in IPO

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.

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