10 IPO Allotment Tips | Increase Your IPO Allotment Chances | IPO India

Hello Readers, Welcome to our comprehensive guide, “IPO Allotment Tips – Increase Your IPO Allocation Chances.” Learn strategies that can elevate your IPO investing game as we demystify the intricacies of allocation dynamics. Whether you are a seasoned investor or new to the IPO landscape, this article serves as your key to understanding the factors that influence IPO allocation decisions and actionable tips to increase your chances.

Explore the art and science of IPO allocation that goes beyond the surface. From decoding the IPO allocation process to uncovering influential factors, we provide the knowledge and tools needed to make informed decisions in the competitive world of initial public offerings. Join us on this journey to unlock the secrets of successful IPO allocation, empowering you to make strategic decisions that resonate in the dynamic field of IPO investing.

What is an IPO?

An initial public offering (IPO) is a method by which a non-public employer sells shares of its inventory to the public for the first time. This allows the corporation to raise capital from a variety of buyers and become a publicly traded agency. IPOs are often seen as a milestone for corporations, as they can provide assets to expand operations, expand new merchandise, and grow market share.

Know more about IPO

IPO Allotment Process

Announcements of IPOs by well-known companies create excitement among investors. An IPO or initial public offering is the process of offering shares of a private company to the public in a new stock issue that helps the company raise capital from public investors.

Companies announce their decision to go public when they need to raise capital for operations or expansion and are confident about their future performance. When the IPO is finally announced in the market, the company usually keeps the bidding window open for 3 days. These days the ancestor applies for shares in that company. Once the applications are submitted within that period, the IPO allotment process takes place which depends on the response the IPO receives from the progenitor. Various factors affect the allocation process.

Factors Affecting IPO Allotment

Below are some of the factors that affect IPO allotments. By knowing which you can increase your chances of IPO allotment. And then we will know some tips by which you can increase your chances of IPO allotment.

• IPO Oversubscription and Computerized Lottery
• Computerized Lottery
• Invalid Application
• Bid price is lower than issue price

IPO Allotment Chances

There is no fixed IPO allocation formula or IPO allocation opportunity calculator that can guarantee investors an allocation in an IPO. The allocation depends on the level of subscription in the IPO and the category the investor has applied for.

In most IPOs, the allocation is done by lottery because it is oversubscribed. Your chances of getting allotment are same as other applicants.

Although there is no rule that can guarantee investors an allocation in an IPO, investors can always follow some best practices to increase their chances of allocation as outlined below:

• In retail category, apply for 1 lot share from multiple family accounts.
• If you have to choose between retail, sHNI and bHNI categories, wait till the last day to see the response and find out where you have the best chance of allocation.
• Do not apply at the last minute. Try to apply before 1 pm. On the closing day of the issue.
• Make sure you fill all the information correctly.
• Make sure to approve the UPI command by the deadline.
• Check the basis of allotment document to determine your eligibility for allotment. If you feel that you should have been allotted IPO shares but have not received them, contact the registrar for a response.
• Study some old support documents of allocation to understand how allocation is done.

IPO Allotment Tips – Increase Your IPO Allotment Chances

So here are some tips. Tips that will help you increase your IPO allotment chances. So let’s know all the tips in detail one by one.

Avoid Large Applications

SEBI’s allocation process treats all retail applicants (less than Rs 200,000) equally. So, even if you submit a substantial application of 1 lakh, you may not be eligible for consideration in the event of oversubscription. Large applications are great for large IPOs where the retail segment is reasonably certain to remain unsubscribed. For oversubscribed IPOs, minimum bids should be used with multiple accounts. This will facilitate the investment of additional funds in many other IPOs.

Multiple Applications with Multiple Demat Accounts

You can use different demat accounts to increase your chances of IPO allotment. Yes, you can do that. You may think this is very complicated but you will be surprised to know that it is very easy. You can open multiple demat accounts using the same pan card. And along with this you can also open a demat account using pan card of your fellow friends and family. Thus you can increase your IPO Allotment chances by using more accounts.

As large applications are rejected, you can submit multiple applications with the same amount from separate demat accounts. When six applications are submitted for a single lot versus one application for six lots, the probability of successful allocation increases by a factor of six. These demat accounts should be linked to separate PAN accounts, which needs to be kept in mind.

To Open a trading and demat account in Zerodha

Bid at Cut-Off Price

Investors are often confused between the bid price and the cut-off price.” “Cut-off price” means whatever price an investor is willing to pay as determined by the company at the end of the book-building process. Once the cut off is applied, the investor has to bid on the highest price band. Excess amount, in case of lower price, excess amount is refunded.

Avoid Mistakes with You IPO Application

Do not rush to fill the IPO form. The investor should fill the details like amount, name, DP ID, bank details etc. correctly. A printed form is also available so should go with it. The safest way to apply for an IPO is through ASBA. One can go with ASBA through their bank but the investor needs to check the details before making that application. It will definitely avoid technical rejection.

Approve the Mandate Request

Generally, most investors who apply for an IPO through brokers believe that the job is done after applying. Upon applying for an IPO, you will receive a mandate request. You must accept the request through the banking application or website. If the order is not accepted, your money will not be frozen, and you will not be considered for IPO allocation. So, make sure you accept this command and don’t miss the chance of allotment.

Don’t Wait Unit the Last Minute

Some investors depend on the subscription level of High-Net-Worth Individuals (HNI) and Qualified Institutional Buyers (QIB) before placing their orders. Some investors are interested to see how the HNI and QIB category buy IPOs. If you apply on the last day, there may be some complications, like the bank account not responding due to strong demand from HNI and QIB investors or other technical issues. Additionally, since most banks do not accept applications after 4 pm, filing of an IPO application may be delayed. So, don’t risk till the end, and apply early.

Apply Early

Generally, an IPO is open for three days. To increase your chances of IPO allotment, apply during the first two days. Often many people apply for IPO on the last day. This is because they want to see response to IPOs across categories – retail, HNI and QIB. However, if you are confident about the company, you should apply for IPO regardless of its IPO demand. Also, applying for it may, in the end, lead to some technical problems. Thus, if you want to increase your chances of IPO allocation, don’t wait till the last day.

Stay connected with us to stay fully informed about upcoming IPOs. We will keep you updated about upcoming IPOs. So that you can fill the application for IPO allotment on time.

Ensure You Hold Parent Company Shares

All the strategies mentioned above are relevant for all IPOs; However, this strategy is not applicable to all IPOs. If you own at least one share of the parent company, then you are eligible to apply under the shareholder category.

However, it is applicable only when the parent company of the IPO firm is already trading on the stock exchange and there is a reservation for shareholders of the parent company. Thus, the allocation to shareholders is likely to be significantly higher. Additionally, you can place bids in both the Retail and Shareholder categories. This increases the probability of allocation.

Buying at least one share of the parent or holding company in your demat account is a smart approach to increase your chances of getting an IPO allocation. This can ensure that you qualify for the shareholder category.

Preparing for the IPO Application

So you must have read the IPO Allotment Tips mentioned above. Now if you are ready to fill IPO applications I will tell you 6 simple steps which will help you in filling IPO applications.

• Develop a Strong Understanding of Your Index
• Put Together Your IPO Team
• Construct a Board of Directors
• Get the Timing Right
• Preparing the Roadshow
• Ongoing Communication

Risks at IPO Allotment

However, when it comes to applying for an IPO, there are various types of risks involved and must be properly considered. These risk factors can prevent any meaningful investment and hamper your fund’s growth prospects. Following are the various risks that apply to IPOs.

• No guarantee of getting the shares
• Getting less than the offered rate
• There are a number of variables that determine the profitability of investment
• External influences can affect the price
• Money gets locked for some time

Conclusion

In conclusion, navigating the IPO allotment process requires a strategic approach and a deep understanding of market dynamics. By incorporating the tips discussed in this article, investors can increase their chances of securing allocations in popular initial public offerings. From thoroughly researching company fundamentals to leveraging various investment platforms and staying updated on market trends, a proactive approach can significantly contribute to a successful IPO investment journey.

As the world of IPOs continues to evolve, it is essential for investors looking to capitalize on new opportunities to stay informed and adapt to market changes. Remember, IPO Allotment is a competitive field, and using these tips can give you a competitive edge. As you begin your investment journey, be patient, diversify your portfolio and always consult financial experts for personalized advice. May your IPO ventures be profitable and your investments thrive in the dynamic landscape of the stock market. Happy investing!

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