What is an IPO?
Before we delve further into the world of IPO Allotment Status, a basic understanding of an IPO is important.
The full form of the IPO is Initial Public Offer.
It is primarily the selling of shares of a particular company for the first time. This company is privately traded and wishes to raise funds by going public.
There are many reasons why a company would want to go public.
They are:
- Raising of working capital
- Repayment of debt
- Acquisitions
- Expansion of business
These are some of the most common reasons why companies float Initial Public Offers.
Interested investors pick up forms which are available for free, from the stockbrokers. One can also apply for IPO stocks, online, through online stock brokers.
Each IPO has a designated registrar. A registrar of an IPO is a financial entity that is registered with the stock exchanges and SEBI. These registrars keep records of the issue as well as the ownership of the company shares.
The responsibility of the registrar about IPO Allotment are myriad:
- Allotment of shares to respective investors in an IPO
- Process the refund
- Transference of the shares allocated to individual investors, to their respective Demat accounts.
A Demat account is an account that holds all the financial securities (whether equity or debt) of a particular investor in the electronic form.
In India, the responsibility to maintain Demat accounts lies with two companies:
- National Securities Depository Limited (NSDL)
- Central Depository Services Limited (CDSL)
A Demat account number is provided to the Demat account holder. This number is used to enable all electronic settlements of the trade.
To access the account, a username and a password have to be used.
An IPO gives the company greater access to a whole lot of money. Hence, IPO is considered to be a big step. It also provides the company with the ability to grow faster and expand.
Also, with a company turning public, there is more transparency and with the credibility that comes with share listing, borrowing too becomes easier and with better terms and rates.
Before a company decides to go public, they hire investment banks to gauge the demand, market. Once, that is done the IPO price is set and the date decided.
What is IPO Allotment Status?
IPO Allotment status is a process where retail investors are allocated shares by an IPO through the lottery system, in the event of an oversubscription of the said IPO.
The online IPO Allotment status provides the following details:
- Number of shares applied
- Number of shares allocated
The Main board IPO looks like this:
The IPO Allotment is carried out by the IPO’s Registrar. The IPO Allotment date is the date which is published on the website of the IPO’s Registrar, public announcement.
Read Also: Upcoming IPOs List Calendar – Running & New IPOs In India 2020
How to Check IPO Allotment status?
The allotment is available on the website of the registrar of the IPO. To check the allotment, the investor has to either type in the PAN details or the allocation number of the IPO.
A document is also published on the website by the registrar of the IPO. It is called the basis of allotment document.
This document provides, in details, the information about the number of applications received and the process of how the allotment is done.
This document gives a clear indication of the process that the IPO goes through and the methods in which the allotment is done to promote transparency and effectively share information.
BSE IPO Allotment Status
This is the online form which the investor has to fill, to check the IPO Allotment status for shares listed on BSE.
The Issue type has to be selected: Equity or Debt
The dropdown will provide you with the names of the companies floating the IPO
The IPO application number and the PAN number needs to be provided since they are mandatory fields.
Once completed. Click the Search button.
NSE IPO Allotment Status
The NSE bid allocation module is a handy tool for investors to check on their respective allocations.
The details regarding the allocations will be available on T+1 day. Those details will remain on the website until 6 days after the closure date of the issue.
NSE promises to provide the information regarding the IPO allotment as provided by the registrar.
For investors willing to seek information from the NSE allocation module, need to undergo a one-time registration process. Once that is done, NSE will send an email notification to the registered email provided, consisting of the login details.
SME IPO Allotment Status
The SME IPO Allotment status provides the investor with information regarding the allocation of shares. This information talks about the number of shares that have been allocated to a particular investor, in an Initial Public Offer (SME IPO).
The SME IPO allotment is done through the registrar of the SME IPO.
The SME IPO allotment date is the date on which the allotment is announced through the website of the registrar of the SME IPO.
Investors of SME IPO are also informed by the NSE, BSE, CDSL, and NSDL through email and SMS.
Read Also: How To Apply for IPO through SBI Bank: Is it easy or complex?
The Current Company List
This is the snapshot of the partial upcoming IPO list.
This tells us the name of the company, the exchange the shares traded on, the opening and the closing date, lot size of each share, price of each issue and the total value of the issue in rupees.
The IPO Allotment status can then be got from the registrar of the IPO.
Conclusion
An IPO is a big step for any privately held company. The transition to a publicly funded company comes with a whole lot of perks. However, there are pitfalls too. One of the reasons why returns from IPOs dwindle is because of the wearing-off effect of the hype created by the banks.
The IPO allotment status is an important piece of information for investors who wish to make a killing from the initial sale of shares.
An investor also needs to bid for a minimum number of shares. That is provided in the company list. It is called the lot size.
Also, investors do have the option of bidding from two types of IPOs. The book-building IPO where a range of price is provided and a fixed price, where the issue price is fixed.
IPO Allotment Status FAQs
Q1: What is an IPO Allotment Status?
IPO Allotment status is a process where retail investors are allocated shares by an IPO through the lottery system, in the event of an oversubscription of the said IPO.
Q2: How many days does it take for an IPO to get allotted?
If the IPO of the Book building type, then the maximum number of days taken for the allotment of IPO is 6 days of the IPO subscription days.
Q3: Does IPO Allotment happen on first Come first Serve Basis?
It usually does not happen on a first come first basis. It primarily depends on the response to the IPO from the market. If there is an underwhelming response and the IPO is undersubscribed, then one can get as many lots one has applied for.
However, if there is an overwhelming response to an IPO, then the allocation is based on the number of shares available in the retail quota divided by the minimum lot size.
For example, there are 1 lakh shares and the minimum lot size is 1000, then 100 applicants get shares. However, if the number of applicants is more than 100, a lottery is done for selection.
Q4: Once allotted an IPO, what will be the next step for an Investor?
Once an IPO has been allotted, the investor needs to wait for the listing date. NSE, BSE, and brokerage websites provide investors with that information. Once the company is listed, the investor can sell or buy more of it. The trading process is the same as stocks.
Q5: What is the difference Between a Retail and a Non-Institutional Investor?
Retail investors can apply for shares worth a total of INR 50000. In case, it goes beyond INR 50000, the investor has to apply as a non-institutional investor.
