What is IPO Allotment and how to check its status?
3 min read
Through initial public offerings, or IPOs, private businesses can raise capital from the general public for the first time. Interest among retail investors in initial public offerings (IPOs) is rising quickly as an increasing number of firms seek to list on stock markets. But understanding the IPO process may be challenging, particularly for first-time investors. A crucial but sometimes disregarded stage is the share allocation procedure. This post will go into great detail on what IPO allocation is, how it operates if you open a demat account, and the many ways you may find out the status of your allotment. We shall also examine the consequences that follow allocation. Now let’s get going!
What is IPO Allotment?
The procedure by which a private firm makes its shares available to the public for the first time is known as an initial public offering (IPO). An IPO is the process by which a business issues new stock and sells it to investors via investment banks. The corporation grows its operations and business with the money it earned from the IPO.
Share allocation is one of the most important phases in the IPO process. The procedure by which the business determines how many shares will be allotted to each applicant who submitted a share application during the IPO is referred to as “share allotment.”
The allotment is done in a fair manner based on parameters like investor category and the number of shares applied for. Retail investors and employees usually get priority during allotment. The final allotment is approved by the board of directors of the company.
Announcement of Basis of Allotment
After the allotment is finalized, the company announces the basis of allotment on the websites of the stock exchange as well as the registrar to the issue. The basis of allotment contains critical details like-
– Category of the applicant like retail, QIB, etc.
– Number of shares applied and allotted
– Funds to be refunded, if any
– Date for refund of excess application money
Checking IPO Allotment Status
Investors can check the status of their IPO allotment through various modes:
- Login to the online trading/demat account – Most brokers allow checking allotment status online.
- Contact the registrar – Investors can contact the registrar mentioned in the prospectus and provide application or PAN details.
- Check stock exchange website – BSE and NSE websites also host the allotment data that can be searched.
- SMS alerts – Some brokers send SMS alerts informing about allotment or refund status.
Post-Allotment Process
If shares are allotted, the credit of shares happens in the demat account within 6 working days from the date of allotment. Simultaneously, the refund of excess or full application amount is also processed for unsuccessful applicants.
Within 15 days of listing, the shares get listed on the stock exchanges and trading commences. Investors can then buy or sell the shares on the exchange platforms. This completes the IPO process from application to shareholding.
Conclusion
IPO allotment is a crucial step for investors where the company finalizes the share allocation after evaluating all applications. Checking the IPO allotment status NSE in a timely manner allows investors to remain informed about the outcome of their application and next steps. Whether allotted shares or not, monitoring this process closely helps investors stay on top of their IPO investments from application to listing. Regularly tracking allotment details ensures seamless navigation through the entire IPO process.
