Rules for IPO Allotment


(Gurjot) #1

I had applied in the IPO of Ujjivan Financial Services through ICICI Direct account for 6 lots at the cut off price of 210 per share (Retail Category) which ended last week on 2nd May. My application was accepted and validated, etc but I haven’t been allotted any shares post the allotment process.

I’m really struggling to understand the reasons for the same? The only reason that comes to mind is that I applied on the last day and hours before the IPO closed. I had read on the IPO allotment process before applying that if you apply at the cut-off price you’re guaranteed to get allotment in proportion to the issue subscription (so it was subscribed 4 times in the retail category - I should’ve got 25% of the shares applied for)

So I’m really interested in understanding how the IPO allotment takes place and what mistakes I made??

PS: The objective of this thread is not to focus on the business prospects / financial analysis of Ujjivan or any other company.


(Anup Agarwal) #2

In this case the ipo got subscribed 4 times but there will be lot of investor who would have applied for only 1 lot. i.e. 70 shares. so the no. of subscriber might be as high as 20 times. Hence 1 out of 20 would have got shares in this ipo. Hope this clears your doubt.


(Utkarsh Pandey) #3

Hello Gurjot,
You didn’t made any mistakes. Since IPO’s retail section was oversubscribed by 4 times, ratio for allotment is around 3:8. That means out of 8 people only 3 people will get allotment and that too of only 1 lot, irrespective of no. of lots applied by them. I’m giving you the link for basis of allotment of Dr. Lal Pathlabs which was oversubscribed 4.2 times. http://www.chittorgarh.com/ipo_basis_of_allotment/dr_lal_pathlabs_ipo/511/


(Prabhakar) #4

Hello Gurjot,

Allotment is based on first providing minimum lot to all applicants and hence applying more no of lots wont work if there is over subscription.


(Gurjot) #5

Thanks. So if I understand correctly - the maximum shares allotted to any retail investor cannot be more than 1 lot ~ 70 shares?


(Gurjot) #6

In this case they couldn’t even provide 1 lot to every investor since the no of individual investors who applied for the IPO was more than the maximum number of individual investors who could get 1 lot.


(Utkarsh Pandey) #7

Yes, correct. But the no. of people applying should be around the same mark. And everyone who gets allotment will be getting 1 lot only. Although you can improve your chances by applying for IPO through your wife’s, mother’s and father’s demat account. You should get their account opened as well.


(avdhesh) #8

Me and my Wife both applied for Thyrocare and Ujjiva IPO.We both did not get any share of Thyrocare.
But with Ujjivan ,My wife got 70 share leaving me empty handed.:smile:
However i was the one who asked my Wife to apply for both the issues.

Usually i don’t apply for the IPOs.The thing that i don’t like about them is ,when the issue is lucrative you don’t get anything as it gets oversubscribe.:open_mouth:


(vinay ambekar) #9

https://www1.nseindia.com/charts/webtame/webchart.jsp?CDSymbol=THYROCARE&Segment=CM&Series=EQ&CDExpiryMonth=&FOExpiryMonth=&IRFExpiryMonth=&CDDate1=&CDDate2=&PeriodType=2&Periodicity=1&Template=tame_intraday_getQuote_closing_redgreen.jsp

http://www.bseindia.com/stock-share-price/thyrocare-technologies-ltd/thyrocare/539871/#stock-opportunities

Just an observation regarding Thyrocare listing - the 1-day charts in NSE and BSE (above) start from 9.45am and from price of 660-odd.

The chart on Moneycontrol (below) shows price action starting from 9am where the price fluctuated roughly between 450 - 500. It even came back to 450 at around 9.14am. Probably this is pre-opening time. And then the next tick is 662 at 9.45 am.

I am wondering whether anyone who was on his trading terminal was able to buy it post listing around 450-500 between 9.14 and 9.45?

http://www.moneycontrol.com/india/stockpricequote/hospitals-medical-services/thyrocaretechnologies/TT16


(avdhesh) #10

Trading was schedule to start from 10 AM onward only and Pre-opening from 9:45.
If you check the volume ,it started only from 9:45.


(Sandeep) #11

Please note that the pre opening is from 9 AM to 9:45 AM for IPOs


(arvind.calyx) #12

A very nice read on IPO and current Indian market by Mohnish Pabrai:


(aparab) #13

Quick questions to all - How do they process refund amount in case you do not get any allotment? Do they refund back to Demat account ? How many days do they take to process refund?

Does NRI has separate quota?

Regards

Abhijit


(manivannan.g) #14

Most of the guys applies thorough netbanking (SBI, HDFC, ICICI, etc.,), I use HDFC bank, they typically block the amount for IPO, upon successful allocation, they deduct the amount, otherwise they don’t deduct, they’ll just release it. It won’t be visible in the bank account summary until they deduct.


(aparab) #15

I use HDFC Bank too , glad that the amount is not released to company

I recently applied for 2 IPOs so I will wait for decision and see if bank release funds if I do not get any allotment

Regards

Abhijit Parab