How to Increase IPO Allotment Chances?

An Initial Public Offering(IPO) is a process through which a company offers its shares to the public for the first time. For investors, IPOs are often a rare opportunity to invest early in a company that might offer strong growth going forward. This is why IPOs in India are usually oversubscribed and receive heavy demand.

However, the number of applications/bids generally exceeds the number of shares available. In such cases, allotment is done through a defined process. In the case of the retail investors (RII) category, if bids exceed the available number of shares, the allotment is done on a lottery basis. However, not everyone who applies will be allotted shares. 

IPO allotment is partly based on chance, especially in oversubscribed issues. However, investors can improve their chances by applying through family accounts with unique PANs, checking eligibility for special quotas, and applying early, among other strategies. 

In this blog, we have discussed several steps that investors can follow to increase their chances of IPO allotment.

Learn more about IPO Bidding and how the process works.

Steps to Follow to Maximise Your IPO Allotment Chances

Here are a few key factors to consider for increasing your chances of securing an IPO allotment. By following these steps, investors can increase their chances of receiving an allotment.

1. Apply Through Multiple Demat Accounts (Within Family)

One effective way to increase the probability of IPO allotment is by applying through multiple demat accounts. One can use the Demat accounts of family members, such as parents, spouse, or siblings, when applying for the IPO.

Please note that while applying for an IPO, each application must be linked to a unique PAN. In case of multiple applications under the same PAN, the IPO application will be rejected.

2. Avoid Large Applications in the Retail Category

Many investors assume that applying for the maximum number of lots will increase their chances of success. In reality, for oversubscribed IPOs, all retail investors have an equal chance of securing at least one lot, regardless of whether they apply for one lot or more.

3. Check for Reserved Quotas

Some IPOs reserve a portion of shares for:

• Employees of the company
• Shareholders of the parent or group company

If you are eligible under these categories, applying through these reserved quotas can improve your chances, as they usually attract fewer applications compared to the retail category.

4. Apply Early Once the Bidding Window Opens

Waiting until the final day to apply can be a risky move. Last-minute issues such as UPI delays, payment failures, or banking system errors may result in rejection. Applying early ensures that your application is successfully processed.

5. Use Separate UPI IDs for Different Applications

When submitting multiple applications through family accounts, ensure that each application is linked to a different bank account and UPI ID. Using the same UPI ID for multiple applications can lead to technical rejections.

6. Double-check Your Application Details Before Submitting

An error in IPO application details is one of the common reasons for rejection. It is always important to cross-check and verify your application details. Always double-check your PAN details, demat account number, UPI ID, bank account, etc.

7. Avoid Technical Rejections

A few of the common technical reasons for which your IPO application can get rejected are:

• Using the same PAN for multiple applications
• Incorrect application details
• Insufficient funds in the linked bank accounts

Getting an IPO allotment can be challenging, especially in oversubscribed issues. However, by following the tips outlined in this blog, you can significantly improve your chances. It is also important to apply early and keep track of upcoming IPOs.

For a detailed step-by-step guide, check our blog on IPO Allotment Process.