Dalal Street has seen some of the biggest IPOs making their debut in the market in recent years. It showcases the buzz among investors for IPOs. IPOs allow companies to raise funds from the primary market to finance their operations and fuel growth. 

 

On the other hand, investors find IPOs a great investment avenue to make high returns within the short term. With all this recent chatter around Initial Public Offerings, you may have wondered what an IPO subscription is


Read more about the IPO subscription process if you are considering the recent offerings in the primary market.

What is an IPO Subscription?

Through IPOs, companies can list themselves in the public capital market and seek to raise funds by selling ownership shares. Investors can buy ownership shares in such freshly-listed companies through IPO subscriptions. 

 

Thus, an IPO subscription is a process that allows investors to buy securities from the primary market. This process ends on the day of issue allotment when your securities are credited to your Demat account, and the amount debits from your account.

 

Now that you have the answer to the question, ‘what is an IPO?’, let’s understand the steps required to subscribe to one. 

IPO Subscription Process

To subscribe for an IPO online, you need to follow these simple steps:

  • You must have Demat and trading accounts for IPO subscription

 

  • If you do not have Demat and trading accounts, you can apply for one through a stockbroker

  • You can now go to the ‘IPO’ section in your account and select the offering where you wish to invest

 

  • Enter your basic details and place an order by bidding and entering the lot size

  • Approve the mandate request to block the bidding amount on your account

  • On the allotment day, this amount will be debited from your account, and securities will be credited to your Demat account

 

Note that in the case of oversubscription of the issue, you may get only a partial allotment of shares.

How to Check the IPO Subscription Status?

When planning to partake in an Initial Public Offering, the IPO subscription status is one of the things that you must consider. The IPO subscription status lets you track public sentiment and demand for the IPO. 

 

You can determine your investment strategy based on whether the funds are fully subscribed, oversubscribed or undersubscribed. Here are the steps to check your IPO subscription status online: 

  • Visit the NSE/BSE website and navigate to the ‘Market Data’ section

  • Select the ‘New Public Issues’ option

  • From the list of active IPO subscriptions, choose the one in which you wish to invest

  • Now click on the ‘Bid Details’ option

  • Here, you can check the number of shares offered for sale and the number of shares that have already been bid  

How to Check the IPO Allotment Status?

If you have already subscribed for an IPO, you must wait until the allotment day to know if you have been allotted shares. You can check the IPO allotment status online using the following steps:

  • Visit the NSE/BSE website and navigate to the IPO section

  • Select the IPO for which you want to check the IPO allotment status

  • Enter your applicant number and PAN card details

  • You will be navigated to a new page where you can see the allotment status

 

Before investing in an IPO, it is essential to assess whether the offering will be able to perform as per your financial goal. Moreover, you must own a Demat account to participate in the same. Analysing the company’s financial health in previous years can help determine how the stocks will perform after public listing. 

 

Moreover, gauging public sentiment for an IPO is important before investing in it. You need to know about IPO subscriptions to ascertain the public sentiment toward an IPO.

FAQs About IPO Subscriptions

What happens when an issue is oversubscribed?

An issue is oversubscribed when there is an excess demand for the stock. It means you will not be allotted IPO units as per your bid. In such a case, retail investors will be allotted to provide allotment by way of a lucky draw. 

 

Moreover, HNIs will be provided allotment on a proportional basis, and a discretionary approach will be adopted for allocating the QIIs.

Where can I get the live IPO subscription status?

You can check the live IPO subscription status on the website of stock exchanges. For instance, you need to visit the official websites of NSE and BSE to track your IPO subscription status live.

Can I apply for three bids during the IPO subscription?

Yes, you can make up to three bids for an IPO subscription. However, all these bids must be within the price range.

How can I improve the probability of an IPO allotment?

You should apply for an IPO at the earliest to increase your chances of getting an IPO allotment. Since companies use a book-building strategy to determine the IPO price, make a bid at the cut-off price to secure an IPO allotment.

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