IPO allotment: meaning, how shares are allotted in India and examples

IPO allotment is the decision on who gets shares after the bidding period of an initial public offering (IPO) closes. If investors bid for fewer shares than are on offer, everyone gets what they asked for. If they bid for more, the shares have to be rationed, and the rationing rule is the basis of allotment.

In a popular IPO the demand can be many times the supply, so most applicants get nothing or a small number of shares. Being allotted nothing is not a mistake or a penalty. It is the result of a rule applied to everyone in the same category.

The basis of allotment is finalised by the company, the registrar to the issue and the stock exchange together, and it is published as a document. That document is the final word on how many shares each category got and how many applicants were chosen.

Before bidding opens, the offer is divided into portions. Each portion is allotted separately, so a retail bidder competes only with other retail bidders, not with large funds. The split depends on the route the company uses under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as of November 2026.

A company that meets the profitability track record usually offers at most 50% to qualified institutional buyers (QIBs), at least 15% to non-institutional investors (NIIs) and at least 35% to retail investors. A loss-making company, which many startups are, follows the other route: at least 75% goes to QIBs, no more than 15% to NIIs and no more than 10% to retail. Always read the exact split in the offer document.

• Retail individual investors: bids up to ₹2 lakh in value.
• Non-institutional investors (NIIs): bids above ₹2 lakh, often called HNIs, split into a small and a big band.
• Qualified institutional buyers (QIBs): mutual funds, insurers, banks and similar institutions.
• Anchor investors: institutions that commit a day before the issue opens and are allotted separately from the rest of the QIB portion.

When the retail portion is oversubscribed, shares go out by computerised lottery, and every successful applicant receives one minimum bid lot. A lot is the smallest number of shares you can apply for, usually priced at roughly ₹14,000 to ₹15,000 at the top of the price band, though the offer document states the exact lot.

Bidding for ten lots does not give you ten times the chance. Each valid application is one entry in the draw, and the winners get one lot each. This is why many people split a family's bids across several demat accounts, with each applicant using their own PAN. One PAN can bid only once per category, and duplicate bids on the same PAN are rejected.

If the retail portion is only slightly oversubscribed, there may be enough shares to give some winners more than one lot. The registrar's basis of allotment document shows this in a table by number of shares applied for.

The NII portion is split into a small band for bids from ₹2 lakh to ₹10 lakh, which gets one third of the NII shares, and a big band above ₹10 lakh, which gets two thirds. Methods are set out in each offer document and basis of allotment, and descriptions differ between sources, so treat the registrar's document as the authority. In general, larger NII bids are allotted on a proportionate basis and the allotment can be scaled back to a minimum NII lot where demand is heavy.

QIBs are allotted proportionately. If the QIB portion is subscribed 40 times, each institution gets about one fortieth of what it asked for, subject to rounding. There is no lottery for institutions.

Anchor investors are allotted before the issue opens to the public. Their shares are not part of the public subscription numbers that headlines quote.

For mainboard IPOs, SEBI's T+3 timeline, which applies to issues opening on or after 1 December 2023, sets the schedule. T is the day the issue closes. The basis of allotment is finalised around T+1, refunds and demat credits happen around T+2, and the shares list on T+3. Some websites say the status appears on T+2, so confirm the dates in the issue timetable.

SME issues can follow different timetables. The dates in the prospectus always override a general rule of thumb.

The most common reason is simple oversubscription: more people applied than there were lots. The second is a rejected bid. Reasons include a mismatch between name and PAN, an inactive or wrong UPI mandate, a bid made at a price below the final issue price, or more than one bid on the same PAN.

A third reason is the category itself. If you bid a large amount hoping for proportionate allotment, you may have been placed in the NII band, where competition and rules are different from retail.

If you were not allotted, your blocked money is released. In an ASBA bid, the money never leaves your bank account; it is only held and then unblocked.

Open the registrar's IPO status page, which is linked from the company's IPO page and from the exchange websites. Registrars include Link Intime, KFin Technologies and Bigshare. Pick the issue name and enter your PAN, application number or demat account details.

The status will read allotted, not allotted or, sometimes, a rejection reason. If it reads allotted but shares are not in your demat account by the listing day, contact your broker or depository participant.

SME issues list on separate platforms of the exchanges, with their own lot sizes and timetables, and the lot is often much larger in rupee terms. The basis of allotment is still published by the registrar, but retail and other categories can be split differently, so read the SME prospectus on its own terms.

The anchor book is a different animal. Anchor investors are large institutions that agree to buy before the issue opens to the public, at a price fixed by the company and its bankers. They are allotted in a closed process, and the number of shares they take is disclosed in advance. Their allotment never competes with your bid, but it does reduce the QIB shares left for institutions bidding later.

Subscription figures and allotment are different things. A 50 times oversubscribed issue says demand was high, not that each retail applicant had a 1 in 50 chance. The retail category can be subscribed far less or far more than the total.

Check which category a number refers to. A headline about the total subscription can hide a retail portion that barely filled. This guide is general information, not investment advice, so check the offer document or a professional before acting.