Understanding the IPO Allotment Process — How Are Shares Allocated?

Learn how the IPO allotment process works, how shares are distributed, and how to improve your chances of getting allotment.

RR_Finance RR_Finance
Nov 5, 2025 - 07:12
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Introduction

Every IPO investor eagerly waits for one thing — the allotment result.
But how does this process actually work? Why do some investors get shares while others don’t, even after applying correctly?
Let’s demystify the IPO allotment process and understand how shares are distributed.

Step 1: IPO Subscription

Investors bid within a specified price band and apply through ASBA or UPI. Once the issue closes, the subscription data is categorized as:

  • Retail Investors (up to ₹2 lakh)

  • Non-Institutional Investors (NII)

  • Qualified Institutional Buyers (QIB)

Step 2: Oversubscription Handling

If the IPO is oversubscribed, shares are distributed based on lottery or proportionate basis depending on category.

For Retail Category:
If demand exceeds supply, a lottery system ensures fair distribution — every valid applicant gets an equal chance for at least one lot.

For NII & QIB Categories:
Allotment is proportionate to the amount of shares applied for.

Step 3: Registrar’s Role

The company’s registrar (like Link Intime or KFin Technologies) verifies all applications, removes duplicates or invalid ones, and finalizes allotments as per SEBI rules.

Step 4: Credit of Shares & Refunds

  • Successful applicants receive shares in their demat account before listing.

  • Unsuccessful applicants get funds unblocked or refunded automatically within a few days.

Step 5: Listing on Exchange

Once shares are credited, the company lists on the stock exchange — typically within a week of issue closure.

How to Check IPO Allotment Status

You can check your status on:

  • NSE/BSE website (using PAN or application number)

  • Registrar’s website (Link Intime / KFin)

  • Your broker or bank portal

Common Reasons for Non-Allotment

  • High oversubscription

  • Incorrect UPI approval

  • Technical errors in application

  • Multiple applications under same PAN

How to Improve Your Chances

  • Apply through multiple demat accounts (different PANs in family).

  • Ensure UPI approval before cut-off time.

  • Apply on the first or second day to avoid technical rush.

Conclusion

IPO allotment isn’t luck alone — it’s a systematic process driven by SEBI regulations. Understanding it helps you apply smarter and manage expectations better.

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