IPO: How to Increase IPO Allotment Chances

IPO: How to Increase IPO Allotment Chances 13 ways to know?

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IPO: How to Increase IPO Allotment Chances: Let Know

Here you will learn “How to increase IPO allotment chances” Investing in an IPO(Initial Public Offering) has become a popular way to earn potential high returns quickly. However, the growing demand for IPO often leads to our subscription, making it challenging for retail investors to secure allotments. If you are wondering how to increase your chances of getting an IPO allotment this comprehensive guide will walk you through problem strategies and tips. Whether you are a seasoned investor or a new Kamar these actionable insights will help you apply your IPO application process.

Understanding the IPO allotment process

Before diving into tips to improve our chances it’s hard to understand how you are not working here is a simplified specification mentioned below.

  1. Book-Building IPOs: Most IPOs follow this method where a price range is set. Investor should be within the range and shares are allotted based on demand.
  2.  Oversubscription: the number of available shares allotted for retail investors is done why I lottery system.
  3. Minimum Bid Lots: IPO applications Must be submitted for at least one lot which is the smallest quantity of shares offered in the IPO. 

In Oversubscrived IPOs, retail investors typically have an equal chance of allotment per application, regardless of the amount applied. Now that you understand the basics, let’s explore the strategies to increase your chances.

1. Apply through multiple Demat Accounts

One of the most effective ways to enhance your chances of IPO allotment is by applying through multiple Demat Accounts. Here is how you can do it:

  • Family members account: Use demat accounts of your family members, such as your spouse, parents adult children, to submit multiple applications. Ensure that each account is linked to a unique PAN.
  • Compliance: Avoid submitting multiple applications using the same PAN, otherwise it will be rejected.

Tips:

Diversify applications by bidding for the minimum lot size in each account to maximise the number of changes in the lottery system.

2. Apply for the minimum Bid Lot

Retail investors often assume that applying for higher amounts increases their chances of allotments. However, this is a misconception. In oversubscribed IPOs, allotment is decided through a lottery system, not the amount invested. Applying for the minimum bid lot ensures your application is eligible for the lottery draw without unnecessary financial commitment.

Example:

If an IPO minimum lot size is 15 shares and priced at Rs 1000/share, apply for just one lot (15) shares. Submitting multiple small applications through different accounts is more effective than submitting a single large application.

3. Submit Your Application Early

Timing Plays a most important role in IPO applications. Although the allotment process does not prioritize early applicants, applying early reduces the risk of last-moment technical issues or bank server connections.

Benefits of Early Application:

  • Avoid server crashes on the last day.
  • Resolve any errors or discrepancies in your application promptly.
  • Ensure your funds are blocked without delays.

4. Use the ASBA facility 

Application Supported by Blocked Amount (ASBA) is a mandatory method for IPO applications. Here’s why using ASBA is essential:

  • No upfront Payment: Your funds remain in your bank account until the allotment is finalized. 
  • Simplified Process: Most banks offer ASBA through net banking, making the application process seamless.
  • Compliance: SEBI mandates ASBA for IPO applications, ensuring your application is processed correctly.

Step to apply via ASBA:

  1. Log in to your bank’s net banking portal.
  2. Navigate to the IPO section.
  3. Select the IPO and enter your bid details.
  4. Confirm the application.

Ensure the name and PAN in your bank account and Demat Account match to avoid rejection.

5. Check and Update Your Details

Errors in your application details can lead to rejection. Here’s what you should verify:

  • Pan and Demat Account: Ensure they are correctly linked and updated.
  • Bank Account: Verify that your bank account is active and has sufficient funds for the application.
  • KYC Compliance: Complete the Know Your Customer (KYC) process with your broker and bank.

Common Mistakes to Avoid:

  • Typographical errors in PAN or Bank account details.
  • Using an inactive or mismatched Demat Account.
  • Insufficient funds in the bank account.

6. Avoid Technical Rejections

Technical Rejections are one of the main reasons for unsuccessful IPO applications. Here more common reasons are below:

  • Mismatch in names across PAN, Demat and Bank Accounts.
  • Submitting multiple applications with the same PAN.
  • Incorrect or incomplete bid details.
  • Applying for less or more than the minimum or maximum bid lot.

Tips: Double-check all details before submitting your application to ensure accuracy.

7. Apply through different banks

Diversifying your applications through different banks can reduce the risk of technical errors. Each bank may have slightly different processes or interfaces for IPO applications. By spreading your applications across multiple banks, you minimize dependency on a single system.

8. Focus on Unsubscribed IPOs

While most investors gravitate towards high-profile IPOs, less popular ones may offer better chances of allotment. Keep an eye on:

  • Subscription Data: Monitor the subscription status of IPOs during the application window.
  • Institutional Demand: Low demand from institutional investors may increase your chances.

Tips: Use websites and platforms that provide real-time IPO subscription data to identify opportunities.

9. Use UPI for Faster Processing 

Many Brokers and banks now support IPO applications via UPI (Unified Payments Interface). This method benefits:

  • Instant Fund Blocking: Ensure your application is processed quickly.
  • Real-Time Alerts: Receiving notifications for payment approval and allotment updates.

Step to Apply Using UPI:

  1. Select UPI as the payment method in your broker’s platform.
  2. Enter your UPI ID and approve the payment request in your UPI app.

Ensure your UPI app is linked to the bank account used for IPO applications.

10. Monitor Subscription Status

Keep track of the IPO subscription status during the application. This data helps you gauge demand and strategize your application:

  • Retail Quota: Check if the retail portion is oversubscribed.
  • Institutional Interest: High institutional interest often indicates strong demand and increasing competition.

Subscription data is available on the stock exchange website (NSC) and (BSC) and financial news portals.

11. Diversify Across IPOs

Instead of focusing all your efforts on a single IPO, apply for multiple IPOs. With this approach:

  • Increase your overall chances of allotment.
  • Reduces reliance on a single IPO’s performance.

Consistent participation in IPOs builds experience and helps you identify trends in allotment patterns.

12. Avoid Last-Minute Applications

Applying at the last minute increases the risk of technical issues such as:

  • Server connection.
  • Delayed fund blocking.
  • Application errors due to hasty submissions.

Submit your application well before the deadline to ensure it is processed smoothly.

13. Stay Informed

Stay updated with the latest IPO news, trends, and regulations to make informed decisions. Reliable sources include:

  • Stock exchange website (NSC and BSC).
  • Financial News Portals, such as CNBC, Moneycontrol, and Economictimes.
  • Your broker’s research reports and alerts.

Additional Tips for Successfully IPO Investing

  1. Understand the company’s Fundamentals: Before applying for an IPO, research the company’s business model, financial health, and growth potential. Look at their red herring prospectus (RHP) for detailed insights.
  2. Learn from Past IPOs: Analyze the performance of similar IPOs in the past to understand trends in allotment and post-listing gains.
  3. Be cautious of Hype: Don’t blindly follow the crowd. Assess whether the demand for the IPO is backed by solid. Fundamentals or just market speculation.
  4. Set Realistic Expectations: IPOs are not guaranteed to provide high returns. Understand the risks and be prepared for market fluctuations after listing.
  5. Engage with a Reliable Broker: Choose a broker with a proven track record of seamless IPO application and strong customer support.

Concussion

Securing an IPO allotment may seem challenging, but with the right strategies, you can significantly improve your chances. Apply through multiple Demat accounts, focus on minimum bid lots, and use the ASBA facility to streamline your applications. Stay informed, diversify your investment, and avoid common mistakes too.

FAQs:

1. How do I increase my IPO probability?

Ans:

  • Apply with the multiple Demat Accounts which is registered with your family members.
  • Avoid applying at the last minute.
  • Invest in the multiple lot sizes with the different accounts.

2. How do I get confirmed IPO allotment status?

Ans. You should check your registered email or registered mobile number or log in to nscindia.com/products/dynaContent/equity/ipo_login.jsp.

  • Select the symbols from the drop-down options.
  • Enter the application number.
  • Click on Get data.

3. What is the Grey Market in IPO?

Ans. (GMP) Grey Market Price is an IPO that refers to an unofficial market where shares of a company are traded before they are officially listed on the stock exchanges. It is also known as the “Parallel market” and operates outside of the regulatory preview of stock exchanges or market authorities. This is the price at which the shares are traded in the grey market over and above the IPO issue price. It reflects investors’ sentiment about the IPO’s demand and potential performance.

Example: If an IPO is priced at Rs. 100/share and GMP is Rs. 30, the shares are trading at Rs. 130 in the grey market.

Know more about Mainboard IPO vs SME IPO

178 thoughts on “IPO: How to Increase IPO Allotment Chances 13 ways to know?”

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