Are you curious about how actually IPO is allotted? or want to know why a numbered ball is drawn during IPO allotment process?
Well, in this. Article I am going to tell everything that goes on inside the system and explain everything “How actually IPO are allotted?”. After closing the issuance of IPO, the issue manager collects all the applicants’ data in a single table.
IPO allotment process takes place in the following steps.
In the Pre-allotment process, all the invalid applications are sorted out. This process has to be done before the actual allotment. The pre-allotment process selects only those applications that are valid. All the valid applications received from different DPs and Mero Share applications are sorted in a tabulated form on the basis of their applied timing in the following format.
Following are the reason for IPO rejection.
- Applying from multiple accounts by a single person in a single IPO.
- Insufficient balance
- Incorrect entry of BOID
- Unregistered CRN
- Selection of odd-lot unit
Read – Why IPOs are Rejected?
On the day of allotment, applicants are selected in the lottery system. The allotment program is live telecasted through social media channels by issue managers. Journalists, Representation of investors, and other stakeholders also take part in the allotment program.
For the allotment, the first random number of selected from the basket. The number contains 1- 9 will determine who will get the first IPO. After that, the skip value is added to the first lucky number to determine who will get the next IPO.
Myths About IPO Allotment
Is IPO allotment fair?
Yes! It is. The allotment is done by software and lottery method. So, there is no business.
Does Demat account matter?
No, there is a relationship between IPO allotment and bank DP. There is an equal chance involved in the allotment of the share. It does not matter wherever you open your Demat account.
Does apply timing make any difference?
Myth – If you apply different timing while you applying for multple member’s IPO in the famly, there is chance.
No. Since, the information of applicants are randomly sorted. There should not be any importance of timing.
Is UnVerified means rejection?
No, UnVerify signifies that your application is yet to be checked. Read more about IPO statuses here – “Verified”, “Unverified” & “Rejected” Meaning in Mero Share.
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