“No shares awarded to me in IPO, why?” “I haven’t received any allotment in many applications” “why am I not obtaining allotment in any of the IPOs?” are common questions among IPO investors.
There are 8 factors to increase chances of IPO Allotment. As a result, it’s evident that the lucky ones acquire allotments in heavily subscribed IPOs. There are some IPOs when even persons who applied with a single application receive an allotment, while others apply many times and yet do not receive an allotment. This demonstrates that the procedure is mechanized, and the allotment is given to the lucky person.
We’ve come up with a few methods to help you boost your chances of getting an IPO allotment:
#1 – Large applications should be avoided
SEBI‘s current allocation procedure considers all retail applications equally. That means that even if you submit a large application worth a lakh rupee, you may not be eligible for a refund if the lottery is oversubscribed. Large applications are excellent for large IPOs where there is a reasonable chance that the retail segment will remain unsubscribed. ” Large applications are ideal for large IPOs with a reasonable likelihood of remaining unsubscribed in the retail segment.”
#2 – Apply using several demat accounts
Another option is to submit multiple applications using different demat accounts. However, while you can apply for an IPO several times, you can only apply for the IPO with a single PAN number. You can, however, encourage family and acquaintances to apply for the same IPO on your behalf several times. As a result, having many demat accounts can boost your chances of receiving at least one allotment.
#3 – Bid at the cut-off price every time
Assume an initial public offering (IPO) has been launched with a price range of $150 to $155 per share. If you bid at the cut-off price, it means you’re willing to buy at any price between $150 and $155 for the item. As a result, using a cut-off price when filling out the IPO application form is a good idea.
#4 – Don’t make a hasty decision at the last minute
Several investors look at subscription numbers in the High Net Worth Individual [HNI] and Qualified Institutional Buyer [QIB] categories before putting their builds on the last day.. Some investors are waiting to see how the HNI and QIB categories purchase IPOs. However, if there is a technical problem, you may have difficulty submitting your application. Furthermore, because most banks do not accept applications after 4 p.m., submitting an IPO application may be too late.
#5 – Purchase stock in the parent firm
Buying at least one share of the parent or holding business in your demat account is a smart strategy to make your IPO a good deal. This will confirm that you are eligible to apply for a shareholder seat.
#6 – It’s important to remember to approve the mandate request
This is a common mistake made by new investors, especially those eager to get their feet wet in the IPO market. They apply for the IPO offered by the brokers and consider the job done. When you apply for the IPO, you will receive a mandate request. You must approve this request through the banking app or website. The funds will not be locked in your account if the mandate is not approved, and you will not be considered for the IPO allotment.
#7 – Within the first two days, apply
You may see that the IPO is open for three days when filling out the IPO application form. If you want to enhance your chances of getting an IPO, you should apply during the first two days. This is because if too many individuals apply on the last day, there may be technological difficulties. Some investors prefer to submit their application forms on the last day since it allows them to gauge the early reaction of investors to the IPO. However, if you want to maximize your chances of getting an IPO allotment in a specific IPO, you should avoid waiting until the last day.
#8 – Make sure you double-check everything
When filling out the IPO form, like with other formal applications and submissions, you must undertake due diligence. Remember to double-check your name, demat account number, application category, and other information on the form. IPO applications have been denied in several instances due to basic errors and incorrect information.
You may also read about: GMP and its effect on IPO listing
When an IPO is oversubscribed, allotments are distributed by a lottery mechanism. As a result, keeping an eye out for undersubscribed IPOs is a good idea. You might also investigate undervalued IPO allotments with low subscription rates. While no one can foresee how an IPO will be distributed, following the steps outlined above will help you increase your chances of earning an IPO allotment.