{"id":17265,"date":"2026-11-06T05:30:33","date_gmt":"2026-11-06T05:30:33","guid":{"rendered":"https:\/\/accelaronix.in\/blogs\/?p=17265"},"modified":"2026-11-06T05:30:33","modified_gmt":"2026-11-06T05:30:33","slug":"ipo-allotment-process-explained","status":"publish","type":"post","link":"https:\/\/www.billcut.com\/blogs\/ipo-allotment-process-explained\/","title":{"rendered":"IPO Allotment Process Explained: Basis of Allotment, Lots and Retail Category"},"content":{"rendered":"

By BillCut
Last updated: 3 November 2026<\/p>\n

The IPO allotment process decides which bids receive shares once an issue closes and the exchange approves the basis of allotment. If demand is lower than the shares on offer, bids are generally met in full. If demand is higher, shares are shared out by a set method. This guide explains that method in plain words. BillCut is a debt platform, not an investment adviser, so this is general education and not a view on any issue.<\/p>\n

What happens after an IPO closes?<\/h2>\n

The registrar to the issue checks the bids, removes invalid ones and prepares the basis of allotment with the merchant banker. The stock exchange then approves it. SEBI investor education material<\/a> says that an oversubscribed issue is allotted on a proportionate basis or by lottery, and that the basis is finalised by the merchant banker and registrar and approved by exchange officials.<\/p>\n

Money is handled through ASBA. SEBI explains<\/a> that the amount equal to the bid is blocked in your own account until allotment. If shares are allotted, the required amount is debited. If not, the blocked money is released.<\/p>\n

What does oversubscription mean?<\/h2>\n

An issue is oversubscribed when total demand is higher than the shares offered. SEBI training material illustrates this with 5,000 shares demanded against 3,000 on offer.<\/p>\n\n\n\n\n\n
Situation<\/th>\nWhat it generally means for allotment<\/th>\n<\/tr>\n
Demand below shares on offer<\/td>\nValid bids can be met in full, as set out in the offer document<\/td>\n<\/tr>\n
Demand above shares on offer<\/td>\nAllotment is proportionate, or decided by draw of lots where the share falls below the minimum lot<\/td>\n<\/tr>\n
Bid invalid or withdrawn<\/td>\nNo allotment, and the blocked amount is unblocked<\/td>\n<\/tr>\n<\/table>\n

How are shares allotted in the retail category?<\/h2>\n

Issues divide shares into investor categories, such as retail individual investors, non-institutional investors and qualified institutional buyers. Each category is allotted separately. The SEBI General Information Document, which applies to public offers, explains the retail method in steps.<\/p>\n

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  1. The shares reserved for retail are divided by the minimum bid lot. This gives the number of retail applicants who can receive one minimum lot.<\/li>\n
  2. If valid retail applicants are at or below that number, each gets the minimum lot. Any leftover shares go proportionately to those who bid for more.<\/li>\n
  3. If applicants are more than that number, a draw of lots decides who receives the minimum lot.<\/li>\n<\/ol>\n

    You can read this in the SEBI General Information Document for public offers<\/a>. The same document says proportionate allotments are rounded to whole shares, and that where the document and the offer specific prospectus differ, the prospectus prevails. The minimum bid lot and the price band differ for every issue, so check them in that issue\u2019s own offer document.<\/p>\n

    What is a lot, and why does it matter?<\/h2>\n

    A lot is the minimum number of shares you can bid for, and bids are made in multiples of it. Because retail allotment is built around the minimum lot, a draw of lots can decide whether you receive one lot or nothing in a heavily subscribed issue.<\/p>\n

    How can you check your allotment status?<\/h2>\n

    The offer document names the registrar and the allotment dates. Registrar and exchange pages generally let you search by application number or PAN. Keep these ready.<\/p>\n