The Indian stock market has seen a surge in Initial Public Offerings (IPOs), attracting many first-time investors eager to capitalise on potential listing gains. After applying for an IPO, a key question arises: how and when can you check your IPO allotment status? For new investors, understanding this process is essential to navigate the equity market confidently. This guide explains the IPO allotment process, key terms, and practical tips to help first-time investors in India make informed decisions.
Why Are IPOs So Popular?
IPOs have gained significant traction among Indian retail investors. High-profile offerings from companies like Zomato, Paytm, and LIC have drawn millions of applications. The appeal lies in the opportunity to invest in a company before it lists on the stock exchange, potentially reaping profits if the share price rises on listing day. However, not every applicant receives shares, making it vital to know how to check the IPO allotment status and understand the process.
What Is IPO Allotment?
When a company launches an IPO, it offers shares to the public across categories like retail, institutional, and non-institutional investors. After the IPO subscription period closes, shares are allocated based on demand, available shares, and regulations set by the Securities and Exchange Board of India (SEBI). For retail investors, oversubscribed IPOs often use a lottery system. For instance, if 10 lakh investors apply for 1 lakh share lots, only one in ten may receive an allotment.
How to Check IPO Allotment Status
Once the IPO subscription window closes, registrars like Link Intime, KFintech, or Bigshare Services manage the allotment process. Here's how to check your IPO allotment status:
Registrar's Website
Visit the registrar's official website (e.g., https://ris.kfintech.com/ipostatus/ for KFintech). Select the IPO from the dropdown menu, enter your PAN number, application number, or Demat account ID, and submit to view your status.
BSE Website
Go to https://www.bseindia.com/investors/appli_check.aspx, select the IPO, and input your PAN and application number. This secure platform displays your allotment results.
Broker Platforms
Brokers notify you via email, SMS, or app alerts once the allotment is finalised. Check the IPO section of your trading app for updates.
When Is Allotment Declared?
The IPO allotment status is typically available 5-6 working days after the IPO closes. A sample timeline:
- IPO Closes: Monday
- Allotment Declared: Friday or Saturday
- Refunds Processed: Next working day
- Listing on NSE/BSE: Within a week of allotment
Keep your application number and PAN handy to check the status promptly.
What Happens If You Don't Get Shares?
If you're not allotted shares, your application amount is refunded within 2-3 working days via UPI or net banking. If there's a delay:
- Contact your broker for updates.
- Reach out to the registrar with your application details.
- Verify that your UPI mandate was active and not declined during the application process.
Key Terms for IPO Investors
Understanding these terms helps you navigate IPOs better:
Lot Size: The minimum number of shares you can apply for, e.g., 15 shares per lot. Applications must be in multiples of the lot size.
Cut-off Price: Retail investors can opt for this to accept the final share price set by the company after book-building.
Oversubscription: When applications exceed available shares, triggering a lottery for retail investors.
Grey Market Premium (GMP): An unofficial estimate of a share's premium before listing. For example, a ₹100 GMP suggests the share may list ₹100 above its issue price, but it's not a guaranteed indicator.
Real-Life Example: Zomato IPO
In 2021, Zomato's IPO was oversubscribed 38 times in the retail category. With a lot size of 195 shares, many retail investors applied for one lot but faced low allotment chances due to high demand. The IPO allotment status was updated on Link Intime's website five days after the IPO closed. Those who didn't receive shares got refunds within two days via UPI, while allotted shares appeared in Demat accounts before listing.
Tips to Boost Your IPO Allotment Chances
Apply Early: Submit your application on Day 1 or 2 to avoid last-minute UPI mandate failures.
Choose Cut-off Price: This ensures you're considered for allotment at the final price.
Use One PAN: Multiple applications with the same PAN or bank account will be rejected by SEBI.
Check UPI Status: Ensure your UPI mandate is active and linked to a valid bank account.
Verify Demat Account: Confirm your Demat account is active and free of issues.
Post-Allotment Steps
If allotted, shares appear in your Demat account before the listing day. You can:
Hold: Keep the shares for long-term growth if you believe in the company's potential.
Sell: Trade on listing day to lock in gains, but note that listing gains aren't guaranteed. Proceeds are credited to your linked bank account.
For example, in the Paytm IPO, some investors sold on listing day for modest gains, while others held longer, though the stock later faced volatility.
Mistakes to Avoid as a First-Time Investor
Borrowing to Invest: Never take loans for IPOs, as listing gains are unpredictable.
Relying on Grey Market Hype: GMP is unofficial and not a reliable predictor of performance.
Last-Minute Applications: Late submissions risk UPI failures or processing delays.
Ignoring Costs: Some IPOs have exit loads for certain categories, reducing profits if sold early.
Multiple Applications: Using the same PAN or bank account for multiple applications leads to rejection.
Safe Platforms for Checking Allotment
Use only trusted sources to check your IPO allotment status:
- Registrar websites (e.g., KFintech, Link Intime, Bigshare Services)
- NSE (https://www.nseindia.com/products/dynaContent/equities/ipos/ipo_status.jsp)
- BSE (https://www.bseindia.com/investors/appli_check.aspx)
- Your broker's official app or website
Avoid unverified links or social media groups, which may lead to phishing scams.
Additional Considerations for New Investors
Research the Company: Read the IPO's Red Herring Prospectus (RHP) to understand the business, financials, and risks.
Set Realistic Expectations: Not all IPOs deliver blockbuster gains. For instance, LIC's IPO listed at a discount, disappointing some investors.
Diversify Investments: Don't put all your money into IPOs; balance with mutual funds or other assets.
Monitor Market Trends: High market volatility can affect listing performance, so stay updated via NSE/BSE or financial news.
Plan Your Strategy: Decide in advance whether you're investing for quick gains or long-term growth to avoid impulsive decisions.
Conclusion: Invest Wisely and Stay Informed
For first-time IPO investors, the journey involves more than just applying-it requires understanding how to check your IPO allotment status, knowing key timelines, and preparing for next steps. While IPOs offer exciting opportunities, they come with risks and no guaranteed returns. By using reliable platforms, applying early, and avoiding common pitfalls, you can navigate the process with confidence. As India's IPO market continues to grow, staying informed and cautious will help you make smart investment choices, whether you're aiming for listing gains or long-term wealth creation.
CAclubindia
