Why was I not allotted IPO shares?
Many investors fail to get IPO allotment, even after their IPO bid was successful, because of oversubscription.
When a company launches an IPO, it fixes the amount it wants to raise through the IPO and decides the number of shares it plans to issue and the price range via the offer. However, in many instances the company receives bids for more applications than it offers. In such a scenario, it holds a computerized lottery to allot shares. This way, each applicant gets an equal opportunity to receive an allotment. So, if your name is not picked in the computerized lottery allotment system, you do not get the allotment of shares.
This is one of the most common reasons for not receiving allotments of shares. However, there are other reasons why you did not receive IPO allotment:
- Bid price is lower than the issue price: In a book-building IPO, when you submit your IPO application, you can choose the price you want to bid within the price range of IPO. You can also simply select “Cut-off”, which means you agree to buy at whatever final price the company decides.
For example, if the IPO price band is ₹100–₹150 and you bid at ₹125, but the final issue price is fixed at ₹150, your bid won’t be considered — because you quoted lower than the final price. That’s why it’s usually best to select the Cut-off price to improve your chances of getting an allotment.
- Invalid Application: If your application is rejected by the registrar during the screening process, your application does not qualify for allotment. The rejection could be due to multiple reasons including making multiple applications through same PAN number, incorrect information filled in your IPO application form or mismatched in the name on your PAN card and the bank account.
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