Multiple Bids in IPO: How It Works

Multiple bids in an IPO refer to the practice of submitting more than one bid within a single IPO application using the same PAN. Instead of placing only one price and quantity, investors can apply at different price levels within the permitted price band. This feature is designed to increase the chances of allotment while remaining compliant with SEBI regulations, especially in book-built IPOs.

Multiple bids in an IPO mean placing two or more bids at different prices in the same application form. All these bids are linked to a single PAN, application number, and bank account. The exchange system considers only one valid application per PAN, but allows multiple bid prices within that application. This helps investors adjust bidding strategy without violating the “one PAN, one application” rule.

Investors place multiple IPO bids mainly to improve allocation probability. Common reasons include:

• To cover the entire price band instead of choosing a single cut-off price

• Manage uncertainty around the final issue price

• Adjust quantity and price combinations strategically

• Align bids with demand trends during the subscription period

• Reduce the risk of rejection due to incorrect pricing

Multiple bids offer flexibility without increasing the application amount beyond limits.

In the retail category, investors can place up to three bids at different prices, provided the total application value does not exceed ₹2 lakh. For HNI or NII investors, multiple bids are also allowed, but minimum application size and funding requirements are higher. Employee categories usually allow bidding at a discount, and multiple bids are permitted within specified limits. In all categories, allotment is based on the final cut-off price.

Although allowed, multiple bids carry certain risks:

• Incorrect bid structuring may lead to partial or no allotment

• Entering bids exceeding category limits can cause rejection

• Duplicate applications using the same PAN are invalid

• Technical errors during bid modification may cancel the application

• Overbidding does not guarantee allotment in oversubscribed IPOs
   

Understanding rules is essential before using this feature.

SEBI permits multiple bids within a single application but strictly enforces the one PAN rule. Investors cannot submit more than one application per category using the same PAN. All bids must be within the price band and category limits. Only the final valid bid at the cut-off price is considered during allotment. Bid modification is allowed until the issue closes, after which changes are not permitted.

Consider an IPO with a price band of ₹100–₹110. An investor may place three bids: one for 50 shares at ₹100, another for 50 shares at ₹105, and a third for 50 shares at ₹110. If the cut-off price is fixed at ₹107, only the applicable bid is considered. Another example is bidding one lot at cut-off price and another at the lower end to manage allocation chances.

Multiple bids in IPOs provide investors with flexibility and strategic control without breaking regulatory rules. They help manage price uncertainty and improve allocation chances, especially in highly subscribed issues. However, investors must follow SEBI guidelines carefully, stay within category limits, and avoid duplicate applications. When used correctly, multiple bidding is an important metric for disciplined IPO participation.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.