What is IPO Allotment Process?

IPO allotment is simply the process of deciding who gets shares after a company's IPO (Initial Public Offering) closes. Think of it like a school raffle everyone buys a ticket (applies for shares), but only some people win prizes (get shares), depending on how many tickets were sold and how many prizes are available.

Key takeaways

• IPO shares are generally allotted within 3–7 days after the issue closes.
• Only valid applications submitted at or above the cut-off price are considered.
• Retail, NII, and QIB applications are processed separately.
• Oversubscribed IPOs may use a lottery system for retail investors.
• Successful applicants receive shares in their Demat account, while refunds are processed for unallotted shares.
• Investors can check their allotment status online using their PAN, Application Number, or DP/Client ID.

Many people apply for an IPO without knowing exactly how shares get divided up. Understanding this helps you set realistic expectations — especially for IPOs that attract huge crowds of applicants.

SEBI splits investors into three groups, and shares are allotted separately within each group, similar to how a school might reserve seats separately for different classes:

How many people apply in each group decides how shares get split. No one can predict in advance whether they'll get shares, but knowing these rules explains why one IPO might be easy to get into while another isn't.

Once allotment is finalised, you can easily check online whether you received shares. This is done through the IPO registrar's website or the stock exchange platform.

Information you'll need:

Steps to check IPO allotment status

1. Visit the IPO registrar's website.
2. Select the IPO you applied for.
3. Enter your PAN number, Application Number, or DP/Client ID.
4. Submit the details.
5. View your allotment status.

If you received shares, they'll show up in your Demat account. If not, your money is refunded (or "unblocked" if you used ASBA/UPI, meaning the amount was never actually deducted, just reserved).

Many people apply for an IPO without knowing exactly how shares get divided up. Understanding this helps you set realistic expectations — especially for IPOs that attract huge crowds of applicants.

SEBI splits investors into three groups, and shares are allotted separately within each group, similar to how a school might reserve seats separately for different classes:

How many people apply in each group decides how shares get split. No one can predict in advance whether they'll get shares, but knowing these rules explains why one IPO might be easy to get into while another isn't.

After an IPO closes, the "registrar" (a company hired to manage the process) works with the stock exchange to decide who gets shares. A few simple rules make sure this is done fairly.

Before understanding allotment, it helps to understand "lot size."

When a company launches an IPO, it doesn't sell shares one at a time — it groups them into "lots," like how eggs are sold by the dozen instead of individually. Retail investors must apply for whole lots, not single shares.

Example: Suppose Company XYZ offers 1 lakh (100,000) shares in its IPO, and each lot contains 10 shares.

Here, an investor can apply for 1 lot, 2 lots, or more — but never for just 3 or 7 individual shares.

Once the IPO closes, invalid applications are removed first. Only the valid ones move forward for allotment.

An IPO is "undersubscribed" when fewer lots are applied for than are actually available — like a movie theatre with more seats than people who showed up.

In this case, everyone who applied gets exactly the number of lots they asked for. Since there's enough to go around, there's no need for a lottery or partial allotment.

What happens when an IPO is oversubscribed?

An IPO is "oversubscribed" when more people apply than there are shares available — like a popular concert with more fans than seats.

When this happens, SEBI's rules decide how the limited shares get divided:

• Mild oversubscription: Every applicant first gets 1 lot if possible, and the leftover shares are split proportionally among everyone.
• Heavy oversubscription: There aren't even enough shares to give 1 lot to every applicant. In this case, a computer-based lucky draw (similar to a raffle) decides who gets shares, keeping the process fair and random.

IPO allotment is how shares get divided among investors once an IPO closes. The registrar checks all applications, follows SEBI's rules, and allots shares based on investor category and demand. Under SEBI's current T+3 rule, this entire process from closing to listing now happens much faster than before. If demand is low, everyone gets what they asked for; if demand is high, a proportional or lottery system decides. Understanding lot size, investor categories, the Basis of Allotment, and how to check your status online can help you know exactly what to expect after applying for an IPO.