How IPO Allotment Works
IPO allotment in India is handled by the registrar (KFintech, Link Intime, Bigshare, Cameo) and follows SEBI regulations. For retail investors, the allotment process has two stages:
- Oversubscribed IPOs: SEBI mandates that each valid retail applicant gets at least one lot (if possible). A computerised lottery then allocates among eligible applicants.
- Undersubscribed IPOs: All valid applicants get full allotment.
What Determines Your Allotment Probability
For mainboard IPOs, retail quota is 35% of the total issue. If 10× oversubscribed with 10 lakh applications, your probability is roughly 1-in-10. Key factors:
- Number of applications: Higher total applications = lower individual probability in a lottery.
- Issue size: Larger issues have more lots to distribute. A ₹10,000 Cr IPO with ₹3,500 Cr retail quota at ₹15,000 lot = ~2.3 lakh lots. If 23 lakh applications, 1-in-10 chance.
- Category: HNI (₹2L-10L bids) and QIB are proportional allotment — bigger bid = more shares.
Practical Strategies to Increase Allotment Chances
1. Apply from multiple demat accounts: Apply via different family members' demat accounts (spouse, parents, adult children). Each PAN gets one application — one more PAN = one more lottery ticket.
2. Apply at the cut-off price: Always bid at the upper end of the price band (cut-off). Applications at lower prices risk rejection if the issue prices at the top.
3. Apply early: Apply on Day 1 or Day 2. Last-day server overload can cause UPI mandate failures.
4. Minimum 1 lot per application: For retail, bidding more lots does not help — you still get one lot or nothing in an oversubscribed IPO.
5. Target less hyped IPOs: SME IPOs and mid-sized mainboard IPOs are often less subscribed. Niche or boring businesses sometimes slip under the radar with better allotment odds.
HNI Strategy — Bigger Bids Matter
If you have ₹2 lakh or more to invest, HNI category (NII) offers proportional allotment. A ₹10L bid in a 10× subscribed HNI category gets the same allotment as 1/10th of that lot. The minimum NII application is ₹2,00,001.