IPO Allotment Status

What is IPO Allotment Status ?

IPO allotment status provides the details about the number of shares allotted to the investor in an Initial public offer (IPO}. IPO allotment process is carried out by the registrar of the IPO. IPO allotment date Is the date when the allotment status is announced to the public on the website of the registrar of the IPO.

IPO allotment calculation is published by the registrar on the basis of the allotment document. Investors can do IPO allotment check by visiting the website of the registrar (i.e. Linkintime,Karvy) once the allotment Is done.

How to check IPO allotment status?

IPO allotment is a process whereby the registrar to the offer allocates the IPO shares to a bidder who has applied for an IPO subscription. The entire process of IPO allotment Is completed within a week of the IPO release date for all large cap IPOs. However,in the case of smallcap IPOs.this process could take longer where the subscription does not meet the particular threshold.

Bidders can check their IPO application status online by either logging in at the BSE or NSE website or at the official registrar's website. IPO allotment status provides the detail about the number of shares allotted to the investor in an IPO. Investors can check the IPO allotment status on the IPO allotment date when the information is made available to the public on the website of the registrar of the IPO. Bidders are also informed about the new IPO allotment status by BSE.NSE.CDSL,and NSDL through email and SMS.

What is the Procedure for the Allotment of Shares in an IPO?

Once the applications for the IPO are received, the allotment process begins. Only after the allotment is complete do the shares get officially issued and thereafter, start getting traded in the secondary market.

Although the exact process depends on the company, the following steps are followed in IPO allotment in general:

1. Apply for the IPO during the bidding window and upon the completion of payment, you become eligible for allotment of shares.
2. On the day of allotment, the registrar conducts the allotment process by:
   • Lottery system - When applications are chosen randomly from the bidding pool for allotment. However, not every applicant is allotted shares in this process.
   • Proportionate allotment - The quantity of shares is adjusted as per the level of subscription. Every applicant receives an adjusted quantity of shares in this process.
3. The status of allotment is disclosed to you via the broker or registrar.

How to check IPO allotment status?

IPO Allotment is done on the basis of a lottery. Let us use a short example to understand the lottery system. Suppose 5 investors have applied for an IPO at ₹100 which is the cut-off price i.e. the price at which the shares are issued. Suppose the investors applied for shares in the following pattern:

However, this has resulted in an oversubscription. Suppose the total number of shares that were being floated for sale was only 4. Since a lottery system is followed, there is no clear way in which the allocation is done. Suppose, the pattern at which the shares will be distributed is:

In the above example, the allocation is done based on a lottery, where the number of shares allocated does not depend on the number of shares applied for.

Note: Had any of these investors bid for the shares at a price lower than the cut-off price, then the would not have been allotted any shares.