AI Overview
How does IPO allotment work in India? After an IPO closes, the registrar processes all valid applications and allocates shares based on the subscription level. Retail investors (up to ₹2 lakh) get allotment through a computerized lottery if the IPO is oversubscribed each valid application gets one chance regardless of lot count. HNI/NII investors get proportional allotment. Allotment results are announced approximately 6 business days after the IPO closes.
Introduction: Why Allotment Is Not Guaranteed
Applying for an IPO does not mean you will receive shares. In India’s most popular IPOs, millions of retail investors apply for a finite number of shares and only a fraction of applicants receive allotment.
Understanding how the allotment process works helps you make smarter decisions: how many lots to apply for, whether to apply in retail or HNI category, and why your application was rejected or not allotted even though it was submitted correctly.
IPO Allotment: The Basic Process
After the IPO subscription window closes, the following sequence happens:
- Day 1 (T+1 after close): The registrar (KFin Technologies or Link Intime, depending on the IPO) receives data from all stock exchanges. All applications are consolidated.
- Days 2–4: Applications are validated. Invalid applications are filtered out those with PAN mismatches, duplicate applications, non-multiple-of-lot bids, insufficient fund blocks, or unapproved mandates.
- Day 5–6: The basis of allotment is finalized and filed with the stock exchange. Share allotment instructions are sent to the depository.
- Day 6 (T+6): Allotment results are published. Successful applicants receive shares in their demat accounts. Unsuccessful applicants receive refunds (the ASBA block is released).
What is the Basis of Allotment?
The “basis of allotment” is the official document that explains how shares were distributed across all applicant categories. It is filed with BSE and NSE and is publicly available after allotment.
The basis differs significantly between the retail and HNI categories.
Retail Category Allotment: The Lottery System
The retail investor category (Retail Individual Investors RII) is reserved for applications up to ₹2 lakh. SEBI rules for retail allotment in oversubscribed IPOs:
SEBI’s core rule: In an oversubscribed retail category, allotment must be done on a one-application, one-lottery-entry basis. This means every valid retail application whether for 1 lot or 13 lots gets exactly one chance in the draw.
What this means in practice:
- If the IPO has 1,00,000 retail shares available and 10,00,000 retail applications, only 1 in 10 applicants can receive shares
- Every single application (regardless of number of lots) has a 1-in-10 chance
- The lucky 10% receive exactly 1 lot each not more, even if they applied for 13 lots
This is why experienced IPO investors typically apply for 1 lot in the retail category for oversubscribed IPOs. Applying for more lots does not improve your odds and ties up more capital unnecessarily.
Minimum allotment guarantee: SEBI requires that allotment be in multiples of the minimum lot and that each successful applicant receives at least one lot.
HNI/NII Category Allotment: Proportional System
The Non-Institutional Investor (NII) or HNI category is for applications above ₹2 lakh. This category follows proportional allotment not a lottery.
How proportional allotment works: If the HNI category receives 10 times subscription (10x), every applicant receives approximately 1/10th of their applied shares (subject to minimum lot restrictions).
Example:
- You apply for 20 lots (₹3 lakh application)
- HNI category is 10x oversubscribed
- You receive approximately 2 lots (20 ÷ 10)
This proportional system means larger HNI applications receive more shares, but the effective return per rupee invested is diluted by the oversubscription ratio.
QIB Category Allotment
Qualified Institutional Buyers (QIBs) mutual funds, insurance companies, foreign institutional investors receive allotment through a discretionary process. The company and its book running lead managers allocate QIB shares based on the quality and timing of bids. Anchor investors (large QIBs allocated shares one day before the IPO opens) receive a fixed allocation.
Why Applications Get Rejected
Even after applying correctly, some applications fail at the validation stage:
| Rejection Reason | How to Avoid |
| PAN mismatch (demat and bank) | Ensure same PAN on all accounts |
| UPI mandate not approved | Approve mandate within 30 minutes of bid |
| Duplicate PAN in same IPO | One application per PAN |
| Non-multiple-of-lot bid | Apply in exact lot multiples |
| Insufficient funds when mandate processed | Maintain adequate bank balance |
| Third-party bank account | Use only your own linked bank/UPI |
| Application exceeds ₹2 lakh in retail category | Stay within retail limit |
How to Check IPO Allotment Status
Allotment results are typically announced 6 business days after the IPO closes. You can check through:
1. BSE Website: Visit bseindia.com → Investors → Application Status / IPO Allotment Status → Enter PAN or Application Number
2. NSE Website: Visit nseindia.com → Initial Public Offerings → IPO Allotment
3. Registrar Website:
- KFin Technologies: kfintech.com/ipostatus
- Link Intime: linkintime.co.in/IPO/
4. Your Broker App: Zerodha Console, Upstox, and Angel One all show allotment status in the IPO section once results are published.
5. iposhareprice.com: Our IPO Allotment Status pages provide direct links to the registrar for every active IPO.
What Happens After Allotment?
If allotted:
- Blocked amount is debited from your bank account
- Shares are credited to your demat account on allotment date (T+6)
- Shares start trading on the listing date (typically T+7 or T+8)
If not allotted:
- The ASBA block is lifted
- Funds are fully available in your bank account typically within 24 hours of allotment date
- No action needed from your side
Can You Improve Your IPO Allotment Chances?
For the retail category in oversubscribed IPOs, the lottery means your odds are fixed by the oversubscription ratio. However, a few legitimate strategies can help:
- Apply through multiple family members: Each family member with a separate demat account and PAN can submit a separate application. A household of 4 people applying individually quadruples the number of lottery entries. Each application must use its own PAN, demat account, and bank account.
- Apply early: Applications submitted early are equally valid as last-minute bids, but early submission avoids technical glitches and mandate expiry risks on the closing day.
- Apply for exactly 1 lot: In the retail lottery, 1 lot gives the same odds as the maximum. Applying for 1 lot across more family member accounts is generally more efficient than applying for 13 lots from one account.
Frequently Asked Questions
How long does IPO allotment take?
Approximately 6 business days after the IPO closes. Listing happens 1–2 days after allotment.
Why did I not get IPO allotment even though I applied correctly?
The retail category is a lottery even valid applications may not be selected if the IPO is heavily oversubscribed. This is normal and expected in popular IPOs.
Can I sell IPO shares immediately after allotment?
No. Shares can only be sold after the IPO lists on the stock exchange, on or after the listing date.
What is the allotment date vs listing date?
Allotment date is when shares are credited to your demat. Listing date (1–2 days later) is when shares start trading on NSE/BSE and you can sell them.
If I apply for more lots, do I get more shares on allotment?
In the retail category for oversubscribed IPOs: No. You receive 1 lot regardless of how many you applied for, if selected in the lottery. In the HNI category: Yes allotment is proportional.
Summary
- IPO allotment happens approximately 6 business days after the IPO closes
- Retail category (up to ₹2 lakh): lottery system each application gets one entry regardless of lot count
- HNI/NII category (above ₹2 lakh): proportional allotment
- Applying for 1 lot in the retail category is as effective as applying for maximum lots in oversubscribed IPOs
- Invalid applications are rejected ensure PAN match, mandate approval, and correct lot multiples
