IPO Allotment
The process of distributing shares among applicants when an issue is subscribed, by lottery in the oversubscribed retail portion.
How it is identified
Test: in an oversubscribed retail portion, allotment is by lottery in minimum lots, so each application has an equal chance regardless of size
Unit
qualitative
In depth
SEBI's rule that every retail applicant receives at least one lot where possible, and that allotment beyond that is by lottery, means applying for more lots does not proportionally raise the chance of allotment — a single application for one lot has the same probability of being drawn as one for ten. Applying through multiple family members with separate PANs and demat accounts is the legitimate way to raise the number of entries; multiple applications on one PAN are rejected. Institutional and non-institutional portions are allotted proportionally rather than by lottery. Understanding this changes how a retail applicant should size an application.
Worked example
A retail portion subscribed 14 times allots roughly one in fourteen applications. Four separate one-lot applications from four family members have four chances; one application for four lots has one.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “IPO Allotment” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.