What You Need to Know About IPO Allotment Status

Initial Public Offering (IPO) issues have caught the interest of many retail investors, but there is a critical aspect of the entire process that can leave some perplexed, which is the IPO allotment status. You need to know how IPO allotment is done and how to ascertain whether you have been allotted any/enough shares, so that you can ensure you gain maximum benefit out of the investment.

In this blog, we will explain the status of an IPO allotment, how the allotment is distributed, and how you can simply check your allotment status to know whether you have actually been allotted the shares or not.

 

What is IPO Allotment Status?

IPO allotment status refers to the process of determining who will be entitled to shares in an IPO after the submission of applications. When a company issues an IPO, it sells a fixed number of shares to the market. Oversubscription typically occurs because there are not enough shares available to meet the demand. Consequently, the allotment process plays a vital role in determining who will receive the shares and in what number.

 

How Does the IPO Allotment Process Work?

When you submit an IPO application, you are actually bidding for the opportunity to purchase shares at the IPO price. However, due to the high demand, you may not receive the entire number of shares as per your request. A quick summary of the usual IPO allotment process will be as follows:

• Application Submission: The process begins with submitting your application to the IPO through a brokerage platform or your bank's trading platform. The application consists of the number of shares you wish to acquire, and most importantly, how much you need to pay the application amount as an advance.
• IPO Subscription: When the IPO is open to subscription, investors place their bids. The overall demand for the shares in the IPO is typically significantly higher than the quantity of shares offered, resulting in oversubscription.
• Allotment of Shares: Once the subscription period ends, the company allocates shares to investors based on demand and the quantity of shares to be assigned. This is allocated via the pro rata system or via a lottery system, depending on the IPO rules.
• Confirmation of Allotment and Refund: In case the shares are not allotted to you, the amount will be refunded to your bank account. If you are allotted the shares, they will be credited to your Demat account.

 

Why Is IPO Allotment Status Important?

An IPO allotment status is important because it informs you whether you will receive the shares at the IPO price at all. By being given shares, you will therefore be able to trade on the first day of listing when the stock goes on the market. If you do not receive any shares, you will be refunded, and you will need to explore alternative investment opportunities.

One thing that an investor must do upon applying to an IPO is check the allotment status. It helps you understand how you made it into the company, or how you can find more opportunities.

 

How to Check Your IPO Allotment Status

Now that you have the understanding of what IPO allotment is and its importance it, the next thing to discuss is how you can easily check your IPO allotment status:

 

1. Via the Registrar's Website

Any IPO is governed by a registrar, an appointed company to deal with the allotment process and other formalities. The majority of IPO registrars have a web-based tool that enables an investor to check their allotment.

Here's how you can do it:

• Step 1: Visit the official website of the registrar.
• Step 2: Go to the IPO section on the home page.
• Step 3: Choose the IPO you participated in among those IPOs that have been announced recently.
• Step 4: Enter your Application Number and PAN (Permanent Account Number).
• Step 5: Click on the "Submit" button, and your IPO allotment status will be shown. You will either be informed that you have been allotted shares or not.

 

2. Through Your Broker or Trading Platform

The online brokers or stock trading websites also have an easy method of checking your allotment in the IPO. When you place an order via your broker, he/she will update you on the allotment of the IPO.

• Step 1: Log in to your brokerage account.
• Step 2: Navigate to the IPO section of the platform.
• Step 3: If you have entered the IPO in the allotment status, you will typically see it on this page.

Mostly, the brokers will inform you through email or SMS regarding their allotment results, so you should not physically be worried about it. In the case you receive an email or SMS of exercising allotment, the shares will automatically be received in your Demat account.

 

3. Check Through the Stock Exchange Website

Information regarding IPO allotments is also available on the National Stock Exchange (NSE) and on the Bombay Stock Exchange (BSE). Although they do not provide any individual status checks, you can regularly check IPO-related announcements and allotments on their websites. This source will be more helpful when you need to be aware of general information with regard to IPO allotments.

 

What to Do After Checking IPO Allotment Status?

After checking your status of allotment and knowing if you have been allotted shares, the next thing to do is:

1. In case you have been Allotted Shares:

• Your Demat account will be credited with the allotted shares.
• Depending on your investment strategy, you can sell them after they are listed on the exchange or keep them long-term.

 

2. In case you have not been assigned shares:

• The amount spent on the IPO application will be refunded to you.
• You are free to research other investment options or submit future IPO applications.

 

Conclusion

IPO allotment status is the most important in your investment. You can quickly know whether you have been assigned some shares since you know how to check your status and how to do it by understanding the process. The process of IPOs can be exhilarating, and the process of allotment itself is a lottery at times; thus, one has to keep up with such events.

When you are planning to apply for an IPO, ensure that you have a trusted entity to apply to in terms of allotment and tracking. After the allotment results are reported and you have checked whether you are eligible or not, proceed and decide depending on the information given.

The best places to begin the process of building long-term wealth include IPOs, whether you get the shares or not, as you get to learn a lot about the stock market.

Begin investing in IPOs with Rudra Shares and know easily whether your allotment occurred or not.