Applied for an IPO and anxiously waiting to know if you got shares? Understanding the IPO allotment process helps you know what to expect, how the lottery works, and when your shares will appear in your demat account. This guide covers everything from the basis of allotment to checking your IPO allotment status, and also explains the key difference between IPO and FPO.
Table of Contents
What Is IPO Allotment?
IPO allotment refers to the process by which a company distributes its shares to investors who applied during the Initial Public Offering. After the IPO subscription window closes (typically 3 working days), the company's registrar determines which applicants receive shares based on the total demand, available shares, lot size, and SEBI regulations.
Not every applicant receives shares. If the IPO is oversubscribed (more applications than available shares), a selection mechanism is used to decide who gets allotment.
How IPO Allotment Works
The allotment mechanism differs based on the investor category and the level of subscription:
For Retail Individual Investors (RII)
- If the retail category is subscribed up to 1x (or undersubscribed), all valid applicants get full allotment
- If oversubscribed, each applicant is first considered for one lot (minimum bid)
- If the number of applicants exceeds the number of available lots, a computerised lottery determines who gets allotment
- Each application gets an equal chance regardless of how many lots were applied for
For Non-Institutional Investors (NII/HNI)
- If subscribed up to 1x, full allotment to all valid applicants
- If oversubscribed, allotment is done on a proportional basis — the more you apply for, the more you get (proportionally)
- Since 2022, SEBI has divided NII into two sub-categories: Rs. 2-10 lakh and above Rs. 10 lakh, with one-third and two-thirds reservation respectively
For Qualified Institutional Buyers (QIB)
- Allotment is on a discretionary basis by the book running lead manager (BRLM)
- At least 50% of the net offer must be reserved for QIBs
Basis of Allotment Explained
The basis of allotment is a document published by the registrar after the IPO closes. It details exactly how shares were distributed across categories. Here is what it contains:
| Section | Details |
|---|---|
| Category-wise subscription | How many times each category (RII, NII, QIB) was subscribed |
| Total valid applications | Number of valid applications received in each category |
| Total shares available | Number of shares/lots reserved for each category |
| Allotment ratio | For retail: how many applicants out of total valid applications received allotment |
| Shares per allottee | Number of shares (lots) allotted to each successful applicant |
The basis of allotment is published on the registrar's website and BSE/NSE within 6 working days of the IPO closing (under T+3 timeline).
How to Check IPO Allotment Status
You can check your IPO allotment status through the following methods:
1. BSE Website
- Visit bseindia.com
- Go to Investors › IPO/FPO › IPO Allotment Status
- Select the IPO name from the dropdown
- Enter your Application Number or PAN Number
- Click "Search" to see your allotment status
2. Link Intime (Registrar)
- Visit linkintime.co.in
- Navigate to Public Issues › IPO Allotment Status
- Select the company name and enter your PAN or Application Number
3. KFintech (Registrar)
- Visit kfintech.com or kosmic.kfintech.com
- Go to IPO Status
- Select the IPO and enter your PAN or DPID-Client ID
4. Through Your Broker
Most brokers (Zerodha, Groww, Upstox, Angel One) show IPO allotment status directly in their trading app under the IPO section.
IPO vs FPO: Key Differences
Investors often confuse IPO with FPO. Here is a clear comparison:
| Parameter | IPO (Initial Public Offering) | FPO (Follow-on Public Offering) |
|---|---|---|
| Definition | First-time share issuance to the public | Additional share issuance by an already listed company |
| Company status | Private company becoming public | Already a public listed company |
| Risk level | Higher (no trading history) | Lower (trading history available) |
| Price discovery | Book building or fixed price | Usually at a discount to market price |
| Purpose | Growth capital, promoter exit, brand visibility | Expansion, debt reduction, acquisitions |
| Information available | Limited to DRHP/RHP | Extensive (past financials, stock performance) |
| Investor interest | Generally higher due to listing gains potential | Moderate, depends on pricing |
What Happens After IPO Allotment
Once you receive allotment, here is the sequence of events:
- Money debited: The application amount for allotted shares is debited from your bank account (the ASBA block is converted to a debit)
- Shares credited: Allotted shares are credited to your demat account within 1-2 working days of allotment finalisation
- Listing day: The stock gets listed on BSE/NSE on the designated listing day (typically T+6 from IPO close under the new timeline)
- Trading begins: You can sell your allotted shares from the listing day itself or hold them as a long-term investment
Refund Timeline
If you do not receive allotment, or receive partial allotment:
- ASBA applications: The blocked amount in your bank account is unblocked within 5-6 working days after the basis of allotment is finalised. No money actually leaves your account if you do not get allotment.
- UPI-based applications: The mandate is released and the blocked amount is freed in your bank account within the same timeline.
- Partial allotment: If you applied for 3 lots but got only 1 lot, the excess amount for 2 lots is unblocked.
Can You Apply for IPO Without a Demat Account?
No, you cannot apply for an IPO without a demat account. SEBI mandates that all IPO applications must include a valid demat account number (DP ID and Client ID). The allotted shares are credited directly to your demat account in electronic form — physical share allotment is not available for IPOs.
This is particularly important for investors who hold old physical share certificates. If you are a physical shareholder looking to participate in IPOs or receive bonus shares/rights issues, you must first convert your physical shares to demat.
How to Open a Demat Account for IPO
Opening a demat account is straightforward and can be done online:
- Choose a Depository Participant (DP): Select a SEBI-registered broker or bank that offers demat services. Popular options include Zerodha, Groww, HDFC Securities, ICICI Direct, and Angel One.
- Complete KYC online: Submit PAN, Aadhaar, bank details, and a selfie/photograph through the DP's app or website.
- E-sign and verify: Sign the account opening form using Aadhaar-based e-sign and complete in-person verification (IPV) via video call.
- Account activation: Your demat account is typically activated within 24-48 hours.
- Apply for IPO: Once active, you can apply for IPOs through your broker's platform using UPI or ASBA.
Understanding the role of your Depository Participant and the difference between NSDL and CDSL can help you make a better choice. If your IPO application involves any RTA-related queries, learn about Registrar and Transfer Agents.
Need Help with Your Shares or Demat Account?
Whether you need to convert physical shares to demat, reactivate an old account, or understand your IPO allotment, our team of experts is here to help.