IPO Investing


Allotments in IPOs


Reservations on a Competitive Basis

Reservation on Competitive Basis can be made in a public issue to the following categories:

  1. Employees of the Company
  2. Shareholders of the promoting companies in the case of a new company and shareholders of group companies in the case of an existing company.
  3. Persons who as on the date of filing the draft offer document with SEBI are associated with the issuer as depositors, bondholders or subscribers to services of the issuer.

    In a public issue by a listed company, the reservation on competitive basis can be made for retail individual shareholders and in such cases the allotment to such shareholders shall be on a proportionate basis.

Any Preference while doing the Allotment?

No, there cannot be any discretion in the allotment process.  All allottees except anchor investors and retail individual investors are allotted shares on a proportionate basis with in their respective investor categories. The allotment to each retail individual investor shall not be less than the minimum bid lot subject to availability of shares in retail individual investor category and the remaining available shares, if any, shall be allotted on a proportionate basis.

Basis of Allotment

After the closure of the issue, the bids received are aggregated under different categories, such as reserved allotments, Qualified Institutional Buyers (QIBs), Non-Institutional Buyers (NIIs) and Retail Individual Investors.

Number of Days for an Investor to Receive the Refund Order/Allotment Advice

The Issuer are required to allot and or application money to be refunded within 15 days from the date of closure of the issue.

The issuer is required to pay interest at the rate of fifteen percent per annum if the allotment letters or refund orders have not been dispatched to the applicants.

 

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Disclaimer:

Information provided herein is purely for dissemination of information and creating awareness among the investors about various aspects of investing. Although due care and diligence has been taken, the Institute of Company Secretaries of India (ICSI) shall not be responsible for any loss or damage resulting from any action taken by a person on the basis of the contents hosted on the website. It may also be noted that laws/regulations governing the markets are continuously evolving, hence an investor should familiarize himself with the latest laws/ regulations by visiting the relevant websites or contacting the relevant regulatory body.