How to Increase IPO Allotment Chances?

An Initial Public Offering (IPO) is one of the most popular ways to participate in the share market. During an IPO, a private company offer their shares to the public for the first time. However, securing an allotment of shares in a highly oversubscribed IPO is often difficult because demand usually exceeds the supply.

In India, the IPO allotment process is managed by the registrar and finalised according to the SEBI guidelines. When an IPO is oversubscribed, the allotment is conducted through a computerised lottery system.

Retail investors often look for ways to increase the chances of IPO allotment, especially in popular public issues with strong market demand.

This article discusses the practical and legal ways to increase the chances of IPO allotment.

What is an IPO Allotment?

An IPO allotment is the process through which shares are distributed among investors after the IPO subscription period ends. Once the bidding closes, the registrar reviews all valid applications and allocates the shares according to the SEBI guidelines.

If the IPO is undersubscribed, all valid applications get the allotment, and shares are credited to their demat account before listing.

However, if the IPO gets oversubscribed, the allotment process changes and is often decided through a computerised lottery system.

For example, if an IPO receives applications for ten times the available shares, not every applicant will receive allotment. In such cases, the registrar uses a computerised lottery system to randomly select the applicants while following SEBI rules.

Steps To Follow To Increase IPO Allotment Chances

Although no strategy guarantees IPO allotment, investors can follow certain methods to increase the probability of allotment.

Apply through Multiple Demat Accounts

Using multiple demat accounts belonging to different family members can improve the probability of IPO allotment. Since allotment in oversubscribed IPOs is conducted on a per-application basis, separate valid applications increase the overall probability of allotment.

• Family account strategy: Applications submitted through parents, spouses, or adult children's accounts can increase the number of valid bids in the IPO allotment process.

• PAN uniqueness requirement: Each IPO application must have a unique PAN number because duplicate applications under the same PAN are rejected.

• Separate bank linkage: Different demat accounts should ideally be linked to e separate bank accounts and UPI IDs to avoid technical issues or application rejections.

Avoid Large Applications in the Retail Category

Many investors believe applying for larger quantities improves allotment chances, but this is not always true in oversubscribed retail IPOs.

• Equal allotment principle: Retail IPO allotment generally prioritises giving one lot to the maximum number of applicants instead of multiple lots to fewer investors.

• No added advantage: Applying for higher quantities in the retail category usually does not improve the probability during heavy oversubscription.

• Capital efficiency: Smaller applications allow investors to diversify across multiple IPO opportunities rather than tying up excessive funds in a single issue.

Apply a Single Lot Application

Applying for a single lot is often considered one of the best ways to improve the probability of an IPO allotment in oversubscribed issues.

• Higher allocation probability: Registrars generally try to allot the minimum lots to the maximum retail investors during oversubscribed IPO situations.

• Optimised application strategy: Single-lot applications increase the number of eligible applicants who may receive allotment through lottery-based distribution systems.

• Useful in popular IPOs: This strategy becomes effective in high-demand IPOs where subscription levels rise significantly above available shares.

Check for Reserved Quotas

Some IPOs offer separate reservation categories for specific investor groups. Applying under eligible quotas may improve allotment chances.

• Shareholder reservation category: Existing shareholders of parent companies may receive dedicated IPO allotment quotas in certain public offers.

• Employee reservation quota: Employees of the issuing companies sometimes receive reserved shares with better allotment possibilities.

• Policyholder quota: Insurance companies launching IPOs may reserve portions for policyholders under specific eligibility conditions.

• Lower competition levels: Reserved categories often witness lower subscription compared to the retail category, increasing allotment probability.

Apply Early Once the Bidding Window Opens

Submitting IPO applications early may help investors avoid last-minute technical issues and payment failures.

• Avoid server congestion: IPO platforms often experience heavy traffic on the final subscription day, causing delays or failures.

• Sufficient correction time: Early applications provide enough time for fixing mandate or application-related problems before issue closure.

• UPI approval advantage: Investors get additional time to approve payment mandates without risking missed deadlines.

Use Separate UPI IDs for Different Applications

Using different UPI IDs for separate IPO applications can reduce payment-related errors and technical conflicts.

• Application independence: Separate UPI IDs ensure smoother mandate approvals across multiple demat account applications during IPO bidding.

• Reduced rejection risk: Shared UPI IDs sometimes create transaction mismatches, leading to application rejection by intermediaries or banks.

• Better payment tracking: Different payment references simplify monitoring of blocked funds and refund status after allotment processing.

Double-Check Your Application Details Before Submitting

Incorrect application details can result in rejection even before the allotment process begins.

• PAN verification accuracy: Incorrect PAN numbers immediately invalidate IPO applications during registrar verification procedures.

• Demat account correctness: Wrong DP ID or client ID prevents successful credit of allotted shares into investor accounts.

• UPI mandate confirmation: Investors must verify mandate approval before IPO closure to ensure valid application processing.

• Category selection review: Applicants should carefully choose the correct investor categories while applying to the share market.

Avoid Technical Rejections

Technical rejections are among the most common reasons for failed IPO applications.

• Duplicate applications issue: Multiple bids from the same PAN under one category usually result in rejection of all applications.

• Insufficient bank balance: Investors must maintain an adequate balance for successful UPI mandate blocking during the application process.

• Signature mismatches: Offline IPO applications may be rejected because of incorrect or mismatched signatures in documentation.

• Late mandate approval: Delayed UPI authorisation beyond the specified deadline may invalidate otherwise correct IPO applications.

FAQs

1. Can I submit multiple applications for the same IPO using the same PAN?

No, you can’t. As per SEBI guidelines, only one application is allowed per PAN. Multiple IPO bids with the same PAN will be rejected.

2. Does applying for more lots improve IPO allotment chances?

No, in an oversubscribed IPO, all retail investors have an equal chance of receiving 1 lot, regardless of the number of lots they applied for.

3. Should I bid at the cut-off price?

Yes, bidding at the cut-off price increases your allotment chances in an oversubscribed IPO.

4. How can I increase my chances of IPO allotment?

Your chances of getting allotment in the oversubscribed IPO are not guaranteed. But you can increase it by following the ways, such as applying with multiple demat accounts, bidding at the cut-off price, etc.

5. What is IPO Grey Market Premium (GMP)?

IPO Grey market premium (GMP) is the extra amount which investors are willing to pay before the IPO gets officially listed on the stock exchange.