If you are continuously applying for IPOs but are not getting any approval, then you must be wondering why this happens. It is especially regretful when an IPO does not get approval, which has a great listing and even after that, a boom is seen in it.
Actually, in the last few years, the participation of retail investors in IPOs has increased. In such a situation, if shares are allotted to an expert in an IPO, then we think about how to apply so that we too get shares allotted.
At the same time, a question arises in the mind whether there is some mistake while applying. Some people always complain that a good IPO never comes out.
Today we will tell you some tricks, which will increase your chances of IPO allotment. There are only a few rules related to applying, by following which you can strengthen your claim.
1. Apply in as many lots as possible (IPO Apply Tricks)
By applying in maximum lots in the IPO of good companies, the chances of getting shares increases.
2. Apply the next day itself
If you have already decided to apply for IPO, then definitely apply on the first or second day, sometimes applying on the last day can lead to problems. UPI ID can also be used for IPO application. On the last day, UPI faces technical problems and payment can get stuck.
3. Apply in the name of different family members
Lucky draw is used for allotment of shares in IPO, the registrar monitors this process. Therefore, retail investors bid from different demat accounts in the name of their family members, so that the share can be allotted in anyone’s name. When you apply for IPO from multiple accounts, then the chances of share allotment increase. Only a demat account is required for application, which is connected to a bank or UPI. Therefore, you should also open a demat account in the name of other family members and then apply in their name.
This process of allotment
In case of oversubscription, allotment is done in a special way. For example, if the IPO of company M is oversubscribed three times. That means the number of applications received is three times the number of shares offered. In simple words, there are three claimants for one share. In such cases, the allotment of IPO is done through a computerized draw.
Know how shares are allotted in an IPO?
Let us explain the process of IPO allotment to you in detail. The IPO of a good company is always oversubscribed. That is, it receives applications from many times more investors than the number of shares available in the IPO, and yet shares are not allotted to everyone.
But if the number of shares offered in the IPO is the same, then all the investors would get the shares allotted in the IPO. When the IPO gets oversubscribed then the allotment becomes a bit complicated. In such a situation, there are some rules for the allotment process.
IPO oversubscription simply means that the number of applications received is more than the number of shares available. In such a situation, the number of retail investors to whom shares are allotted is calculated by dividing the number of equity shares available for allotment. That is, shares are allotted to investors on a proportionate basis.
Retail investors who get allotment in IPO, definitely get at least one lot. That is, bidding for lesser lots can prove to be detrimental for the investor in case of high subscription. That is, the chances of getting IPO allotment are less. Therefore, applying for more and more lots in IPOs of good companies increases the chances of getting shares allotted.
What is IPO?
When a company offers its shares to the public for the first time, it is called an IPO. Through IPO, the company collects funds and spends that fund in the development of the company. In return, people who buy the IPO get a stake in the company. The shares allotted in the IPO are usually listed on stock exchanges like BSE or NSE. Where people can easily buy and sell these shares.
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