An IPO issue is considered a landmark moment for a company, as it denotes joining the big league. Companies with a minimum net worth of ₹3 Crores can issue IPOs to list shares. These are traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
For smart investors who understand financial markets, IPOs pose a lucrative investment opportunity. The anticipation of checking whether or not you have been allotted shares is part of the IPO investing experience.
Keep reading to know how to check IPO allotment status online.
Through the issue of an IPO, a private company invites the general public to invest and own shares of the firm. The IPO allotment process starts as soon as a company starts working on its marketing material to announce the sale of stocks.
Usually, once the marketing material is ready, companies approach promoters and certain institutional investors. This is to privately place a few stocks with them before the actual IPO launch, getting them to generate interest in the IPO.
After this, the IPO is opened to the public for investment for 3 to 10 days. Commonly, two types of IPOs are issued, namely:
As the name suggests, this type of IPO sets the price of the stock on the issue. The set price lets investors know exactly how many shares they will get if the IPO allotment status is successful.
This method is widely used by companies who foresee high demand during the IPO allotment process. The company offers a 20% price band on the stocks. Interested investors can then bid on the shares before the final price is fixed.
This way, the price is driven by investor bids. So, you must specify how many shares you intend to buy and at what price per share.
Book building offers are especially preferred by investors who enjoy price bidding. The exhilaration of finding out how many shares have been placed through the allotment process can be truly rewarding.
In 7 days, the registrar confirms allotment to successful bidders. To check the IPO status of your bid, you can log on to the BSE or NSE website, depending on where the company is listed. You can also view the IPO status on the registrar’s official website.
There are also a few independent financial websites you can visit and enter your application number. This will direct you to the specific stock exchange’s allotment status web page.
You need to log in using the same credentials you used to place your IPO bid:
After entering valid details and selecting the issue name, the system will show you the application status. If the allotment is successful, it displays a bid ID, the number of shares allotted, and the share price.
If the allotment status shows ‘rejected’ or ‘not allotted’, it means that you have not been allotted any shares. This could be for a number of reasons. For example, if there is an error in your application, it gets rejected and is not considered for share allotment.
However, say your bid was too low, and the IPO was highly oversubscribed. In such cases, you don’t get allotted any shares. In either case, the payment you made while applying will be refunded within 4 days, according to SEBI regulations.
The IPO allotment status information is available only for one week after the IPO issue is closed. You will also get notified by BSE, NSE, or NSDL regarding your allotment status.
Once an IPO allotment process is complete, there are two things that can happen:
In this case, the allotment is pretty straightforward. Every investor with a valid application will get a share allotment as requested.
This happens more often, which is where the role of the registrar becomes important. SEBI mandates require that each applicant has to receive at least one lot, which typically comprises around 100 shares. This varies from IPO to IPO and company to company.
For example, say that a company is offering 8,00,000 shares in its first IPO. The minimum lot size is set at 100. Therefore, the maximum number of investors who will get at least one lot is calculated as follows:
8,00,000/100 = 8,000
In scenarios where the shares are oversubscribed by a very large margin, the registrar resorts to allotment via a lucky draw. In such cases, investors with low bids do not get allotted any shares.
Check out the historical performance of companies you want to invest in and make an informed decision on which IPOs to subscribe to. On Bajaj Markets, you can easily open a demat account and invest in IPOs online.
Here are a few benefits of oversubscription of shares for any business creating an IPO:
With higher demand, companies can leverage value by selling the shares to the highest bidder, making more profit
Companies with an oversubscribed IPO can raise funds from the market without borrowing from banks or financial institutions
Oversubscription can pique the public’s interest and boost the company's reputation in the market
Remember, in case of an oversubscription of shares, investors have to fight to buy the shares they initially thought of investing in. Sometimes, investors may only get a fraction of the shares they hoped for or face rejection due to the failure to fulfil certain conditions.
If you want to invest in stock markets or take advantage of IPOs in the future, you must have a Demat account. To open a demat account instantly, you can apply on Bajaj Markets. With many benefits, such as low brokerage fees, multiple subscription plans, and zero annual maintenance charge, you can get started on your investment journey without hassle.
No, if you are not allotted any shares, your money will be ‘unblocked’ and refunded within 4 days, as per SEBI regulations.
You can apply for an IPO only once using a particular name, PAN, and Demat account. However, in one application, you can raise a maximum of 3 bids for the IPO issue. These 3 different price points increase your chances of share allotment.
One of the biggest risks you take when applying for an IPO is the chance that the company does not grow as projected. This leads to low share prices and subsequently reduces the value of your investment. Another risk you assume is the possibility of not getting allotted any shares. However, your money is quickly refunded in this case.
There is not much to do if your allotment status is ‘not allotted’. You can wait for your refund, conduct further market research, and apply for similar upcoming IPOs.