IPO Khel: Understanding the Allotment Process and Why Some Investors Don’t Get Shares
An Initial Public Offering (IPO) is when a private company offers its shares to the public for the first time to raise capital. Through an IPO, the company becomes publicly listed on stock exchanges such as NSE and BSE, allowing investors to trade its shares freely. In India, IPOs are regulated by SEBI to ensure fairness, transparency, and investor protection.
The term “Khel” (sometimes written as “Kheal”) reflects the game-like dynamics of IPO allotment—where not every applicant gets shares, especially in high-demand IPOs. This blog explains the IPO process, why some investors receive allotments while others don’t, and strategies to improve your chances.
What is an IPO?
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The first public sale of a company’s shares.
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Helps companies raise funds for expansion, debt repayment, or new projects.
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Once listed, shares are available for trading on stock exchanges.
IPO Allotment Process: Why Some Get Shares and Others Don’t
How Allotment Works
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Application Phase – Investors apply for shares during the IPO subscription period through brokers or online platforms.
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Undersubscribed IPOs – If demand is less than available shares, all applicants usually receive full allotment.
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Oversubscribed IPOs – If demand exceeds supply, allotment happens proportionally or via a lottery system, often using computerized randomization.
Types of Investors in IPOs
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Qualified Institutional Buyers (QIBs): Banks, mutual funds, and insurers. A fixed portion of shares is reserved for them.
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Non-Institutional Investors (NIIs): High-net-worth individuals and corporates applying for larger amounts.
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Retail Individual Investors (RIIs): Small investors applying for limited shares. A quota is reserved to encourage their participation.
Allotment depends on demand within each investor category. In oversubscribed IPOs, retail investors may or may not get shares due to the lottery-based system.
Why Some Investors Don’t Get IPO Allotment
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High Oversubscription: More applicants than available shares.
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Category Quotas: Applying for shares beyond the reserved retail quota reduces chances.
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Multiple Applications: Can lead to disqualification.
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Technical Errors: Incorrect details or payment failures.
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Company Strategy: Limited allotment may be done to maintain stock price stability post-listing.
How to Improve Your Chances of IPO Allotment
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Apply within the retail quota with smaller lots instead of very large applications.
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Avoid duplicate or multiple applications.
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Use trusted brokers or reliable online platforms to reduce technical glitches.
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Monitor subscription data during the IPO window to apply strategically.
FAQs: IPO Basics & Allotment
What is IPO allotment?
The process of distributing shares among investors who applied during an IPO.
What does oversubscription mean?
When demand exceeds available shares, leading to rationed allotment.
Can retail investors get shares in popular IPOs?
Yes, but allotment is often decided through a computerized lottery.
What are QIB, NII, and RII?
They are investor categories—institutions, high-net-worth investors, and retail investors—with separate quotas.
What happens if I don’t get IPO allotment?
Your application money is refunded, usually within 5–7 working days.
Final Thought
IPOs are exciting opportunities to participate in the growth stories of promising companies. But in oversubscribed issues, not everyone gets shares. By understanding the allotment process, investor categories, and strategies to improve your chances, you can approach IPO investing more confidently and increase your odds of success.