In recent past we have seen enormous subscription in IPO, some IPO are even subscribed 100x making it very difficult for the genuine retail investors to get allotment in IPO.
If you are new to IPO, you can read about what is IPO and precautions to be taken before Investing in IPO : Everything about IPO
There are multiple questions which are raised by investors to us on our Twitter Handle :
- Why I am not getting IPO allotment ?
- How can I assure that I get each & every IPO ?
- How other persons are getting allotment while I am not able to dodge even 1 out of 10 IPO ?
To corelate and answer all these questions we are giving you some genuine tricks and methods to increase IPO allotment chances, some of our known friends have used these tricks and get benefitted from these.
If you want to know about process of IPO allotment, you can check this fabulous article of Economic Times which along with example help you understand the process of IPO allotment in case of oversubscription : Process of IPO Allotment
Tricks to increase IPO allotment
1. Apply with Mutiple Accounts
As described in above mentioned article of Economic Times, Sebi guidelines say in case of oversubscription in the retail category, the maximum number of retail investors who can be allotted the minimum bid lot is computed by dividing the total number of equity shares available for allotment to retail institutional investors (RII) by the minimum bid lot, after technical rejection.
Thus, in case of oversubscription, Retail Investors got allotment “on the basis of draw of Lots“.
Means if you apply through more than one account, your chances of allotment increases. So get the Demat Account opened for all your family members opened to increase your allotment chances.
Note : Do not apply with multiple accounts of Same PAN Number, those applications are liable to be rejected. “One PAN One Application is allowed”
Hence, if you apply from three different Demat Accounts with different PAN, the probability of getting IPO allotment increases.
2. Apply for One Lot only
In case IPO is getting multifold subscription say 5x, 10x, 20x; then their is no logic of going for application greater than one lot, in that case application with single lot is sufficient. In case allotment is by Draw of Lots, then everyone in Retail category will be getting a single lot whether you have applied for 2 lots, 5 lots or 10 lots.
Note : Application for more than one lot are recommended only when IPO is undersubscribed.
3. Always apply at Upper Price Band
When the IPO is getting oversubscribed always remember to apply at Upper price band only, For example Chemcon IPO Price band was Rs. 338 -340/- per share. This IPO was oversubscribed and if investor have applied at Rs. 338 or Rs. 339 he will not get any allotment, only investors choosing cut off/Rs. 340 (Upper Price Band) do got allotment.
4. Apply anytime
As per SEBI Rule, there are no differentiation whether you are applying for an IPO on first day first minute or Last day last minute, So apply anytime as per your inconvenience during IPO period. Chances of allotment for everyone is equal.
5. Put correct Demat and other details
While applying for IPO do ensure to cross check/double check your Demat account details and other details you are filling in application, we remember in an IPO one of our team mate do get his application rejected as he inputted one digit of his Demat account number wrong. So, its better to cross check/double check the details rather than regretting at later stage, he was applying through ASBA (Application Supported by Blocked Amount).
6. Apply in Shareholder Category
In case you are aware that a particular company is ready to brings its Subsidiary companies IPO, then its very beneficial if you are able to dock even a Single Qty share of Parent company. For example : Many Retail investors have bought 1 qty of SBI share before the listing of SBI Cards IPO to have better IPO allotment chances although SBI Card was open lower than its issue Price due to COVID effect on Markets.