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IPO ALLOTMENT SECRET: If you also repeatedly invest money in IPO and every time you feel disappointed, then this news is for you. These days there is a tremendous movement in the primary market. 8 to 10 mainboard IPOs are opening in weeks and sometimes 3-4 companies come together in the market in a single day. But retail investors often complain that despite repeated applying, they are not able to get allotment.
Each IPO has share reserves according to different categories. For retail investors, 10% to 35% share is usually fixed. But there are many times more bids than that part. In such a situation, it is not possible for every investor to get shares.
IPO allotment is just a game of luck, most people believe. However, this is not completely correct. But, if you bid for the shares of IPO by taking care of some basic things, then the chances of getting the shares can increase to a great extent.
If the parent company of the IPO company is already listed, then buying its shares can be beneficial. Only one share of the parent company in the demat account also gives you the opportunity to apply in the “shareholder category”, which increases the possibility of allotment considerably.
In the price band where the company issues shares, it is always better to apply on the upper band. It helps in providing priority to investors.
According to SEBI rules, all retail applications up to Rs 2 lakh are considered equal. Therefore, instead of investing more money, it is more prudent to put minimum bids from different accounts.
Instead of applying maximum bids from the same account, apply minimum from different demat accounts of the family. This can increase the chances of allotment manifold.
Many investors bid the last day. This is risky, because your application may get stuck due to technical problems or bank server slow. It would be better to put bids in the early days of opening IPO.
Along with the brokerage platform, applying with ASBA (Application Supported by Blocked Amount) through the bank is considered more secure. This causes the possibility of rejecting the application to be rejected.
Even a small lapse can reject your application. Such as entering the wrong PAN number, not having enough balance in the bank account, etc. Therefore, while applying, fill all the information carefully.
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