Factors Contributing to Non-allotment of IPO Shares:

The following are some of the reasons behind non-allotment of shares in an IPO

1. Invalid Information in IPO Application Form:

The application form must be thoroughly read before filling it. The information that you furnish must be correct and if wrong, your application shall be rejected immediately.

The IPOs applications are designed and presented as per the rules and regulations set by SEBI. The registrar of the application needs to follow the SEBI guidelines properly.

2. Bidding Price:

If you have filed an application at the IPO having confronted oversubscription, then the bid price defines the winning moment.

When your opted issuer’s IPO gets over subscripted then the issuer decides the final price. It is based on the bid investor offer.

You will fail to obtain an allotment when your bid price happens to be lower than the issue price.

Investors Bids Reduce Chance of Allotment:

As long as the number of shares and the applicants are in the same ratio and not overly scripted allotment is easy.

When the issuer’s IPO gets over scripted then the company does involve in the process of picking the application randomly. It is even known as the lottery.

Tips to Improve Probable Chances to Win Bidding

Follow these simple steps to maximize the chances of Allotment of shares

Fill in IPO Application Details Properly

You will need to fill in your application correctly. Remember, if you make wrong entries then you are most likely to get your application rejected.

Skip Big Applications for IPO Bidding

It is a myth to say that big applications are more valued by the issuer at the IPOs. You may prefer a big application but end up in trouble, there is no guarantee in obtaining an IPO.

In fact, SEBI has established a rule that states to provide the same importance whether it is big or normal application.

Cut-off Price is Suggestive for IPO Application:

In case of book building IPO, the issuer decides on the issue price after closing of the IPO submission date.

In such cases, if you have applied for the upper cut-off price then the probability of winning the bid is higher.

Apply through Multiple Demat Accounts

If you feel that the issuer has good market credentials then an over subscription is most likely to happen.

To strike a bid, if you attempt through multiple demat accounts then the chance of bid approval is higher.

Apply for IPO ahead in time:

It is quite usual that you procrastinate and the delay in submission of IPO applications can deliver wrong information. So completing the application and submission well ahead in time can save your energy and avoid stress.

Advantage in Holding Shares in Parent Company:

You can apply in the shareholders category and since you may find little competition here. Thereby increasing the chances of obtaining the share allotment.

Study thoroughly Company’s Prospectus:

The company’s prospectus explains in brief the important aspects of its performance, strengths, and risks. These details provide you a source of information before making final decisions on applying for IPO.