IPO investments have several advantages for investors in India. Besides getting early entry into public companies, there is also a chance for capital appreciation. Not to forget, several public companies offer dividends and bonus issues to their stockholders. Investors planning to invest in initial public offerings must understand the IPO allotment status. You must know where and How to check IPO allotment status after submitting your application.
- What is the IPO Allotment Status?
- What is the Procedure for IPO Allotment of Shares?
- How to Check IPO Allotment Status?
- Where to Check IPO Allotment Status?
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What is the IPO Allotment Status?
You already know that an initial public offering allows a company to issue its shares to the public. It will also be the first time the concerned entity is issuing its shares to the public. Companies that do not offer shares to the public or have not launched their IPOs are private entities. An IPO will have a subscription period, during which investors can Invest in IPO applications. You can get IPO shares only when you submit the IPO application within the subscription period. After the subscription period, the issuer must distribute the shares to selected investors. It is where the IPO allotment process comes into the picture.
The IPO allotment process is concerned with the distribution of shares to selected investors. It is crucial to note that all IPO applications might not be approved. Some IPO applications are rejected due to inaccurate details. IPO applications can also be rejected in the case of oversubscription. When the number of IPO applications is more than the available shares, the oversubscription condition occurs. Investors can check the Upcoming IPO allotment status to know whether they are approved for IPO shares or not. The IPO allotment status also denotes the number of shares given to the investor by the issuer. You can check the allotment status after you have applied for an IPO.
What is the Procedure for IPO Allotment of Shares?
After investors submit their IPO applications, the issuer does not allot shares randomly. There is an entire process for the calculation of shares to be offered to each investor. This process is called allotment, and it happens before the actual issuance of shares in demat account of selected investors. of selected investors. The allotment of shares will depend on their type, common or preferred. Most companies allot preferred shares before common shares in an IPO. It is crucial to note that the IPO allotment will only start after the subscription period. Once the subscription period ends, the allotment process starts. After allotment, the final task of distributing shares in Demat accounts remains.
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Before discussing what is IPO allotment status, it is essential to understand how shares are allotted based on the investor type. You might know that there are retail and institutional investors applying for IPOs. In most cases, around 25% of shares of a mainline IPO in India are reserved for retail investors. Other shares might be reserved for qualified institutional buyers and/or non-institutional investors. The allotment is based on each investor category's quota (percentage of reserved stocks). The procedure for IPO allotment involves analysing all IPO applications, investor type, number of applied shares, available shares, and other details.
How to Check IPO Allotment Status?
You must visit the stock exchange or registrar’s website to check the IPO allotment status. Find the allotment status page and provide a few details. You must provide your PAN (Permanent Account Number), IPO application number, and Demat account number. In some cases, you might have to provide your DPID (Depository Participant Identification) to check the allotment status. DPID is the client ID of your Demat account provider, also known as the depository participant. It is crucial to note that your DPID will be different from the demat account number. A few other details might also be asked from investors checking the allotment status.
Many registrars inform investors about their allotment via email and SMS. Check the allotment status on the registrar’s website if you haven't received any updates. Investors are also allowed to check the allotment status offline. For instance, you can call the registrar’s office to check for the IPO allotment. However, the registrar will ask for basic details to check your allotment status. Investors can also call their banks and check the IPO allotment status. Banks and brokers also help investors check their allotment status. Since banks and brokers allow investors to submit IPO applications, they also help check the allotment status. Check your allotment status online right away.
Where to Check IPO Allotment Status?
Once you are allotted, shares are transferred directly into the demat account. However, the actual distribution of shares in demat accounts of investors happens a few days after the allotment process. During this period, investors can check their allotment status for surety. The allotment status will inform regarding the approval or rejection of the IPO application. It will also display the number of shares allotted to the concerned investor. Investors must habitually check the allotment status at frequent intervals. Your future investment decisions can be based on your allotment status in an IPO. For those who are new to investing and do not have a demat account, opening a new demat account is a necessary step to participate in IPO and engage in share trading activities.
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Investors can check the allotment status online. However, one must know where to check IPO allotment status online. You can visit the official website of the stock exchange responsible for launching the IPO. For instance, you can visit the official website of the National Stock Exchange or Bombay Stock Exchange. You must locate the website's ‘New Listings’ or ‘Current IPOs’ section. Alternatively, you can also visit your broker’s portal to check the allotment status!
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