Before you can even begin to think about subscribing to an IPO, you need to have the following:
If you do have all the basics in place, you will have to initiate the application process. It’s a fairly straightforward procedure and happens in the following sequence:
When the application process for an IPO is done, one of two things usually happen:
If this were to happen (and it’s not all that often that it does), the registrar will have no need to intervene. Every applicant with a valid bid will get the lot that they requested. No one is bound to walk away without any shares.
This case is more likely to happen and requires a bit of planning from the registrar to decide how the allotment actually takes place. Thankfully, there is a mandate issued by India’s market regulator, SEBI (Securities and Exchange board of India) which stipulates that at least one lot must be given to every applicant. Keeping this in mind, let’s work with an example to understand the allotment process in greater detail.
Let’s assume that Company A offers 7,00,000 shares as a part of it’s IPO and the minimum lot size is 70. As per the SEBI mandate, the maximum number of investors who are bound to get at least one lot is: 10,000(7,00,000 ÷ 70). Consequently, 10,000 investors will definitely receive at least one lot.
Depending on the margin by which the IPO is oversubscribed, the allotment procedure varies. They are dealt with in the following manner:
In case you applied to an IPO and missed out on receiving any shares, one of two things could have happened:
The IPO status is an indication of the collective trust that the company manages to command in the stock market. In recent times, an IPO is a huge event that attracts significant media coverage and interest from both retail investors as well as large financial institutions that are looking to buck the latest trend. Once the allotment procedure is done, the shares are then listed on the exchange within days which then opens it up to trading. Companies do share their IPO calendars to let you know about the upcoming IPO events.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Securities Support WhatsApp Number
+91 9892691696
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
Invest wise with Expert advice