What is IPO Allotment and How to Check IPO Allotment Status?

Process of IPO Allotment -The Fundamentals

1) The IPO issuing company sends out documents for the proposed latest IPO

2) There is a short period when these documents are available for perusal by prospective investors. This is called the "book-building" period.

3) Based on the number of applications received during the book-building period, the IPO issuing company can issue more or fewer shares than it had initially intended to. Sometimes they even cancel the IPO if there isn't sufficient interest. Insurance companies, for example, may cancel an IPO if they don't receive enough applications to cover their initial target amount.

4) Once all this is done, the IPO issuing company announces how many shares will be sold in as per IPO listing and which brokerage houses (if any) will be authorized to sell these shares at that time. At this point, it is too late to subscribe to the IPO list. You'll need to wait for it actually to happen.

5) When the book-building period closes, the process moves into its next phase, which is called "trading." During trading, you can buy and sell shares as you please through your broker at whatever price he chooses to offer them at that time.

Interesting Aspects of IPO Allotment

One of the most exciting aspects for investors in the IPO market is watching their stocks trade right after listing. However, it's important to remember that there will be a lot of volatility in the trading price. Many stocks will fall significantly in value in the months following listing.

If you're planning to invest in a new IPO, it's best to set a limit on your investment and not fall in love with your stock. You can also try investing in mutual funds or diversifying your portfolio with other stocks.

Every investor is given a few minutes to place an order for an IPO watch. This period is known as the 'Allotment period', and it begins from when the price band information is made available to all investors until the IPO closes for orders. The allotment period remains open only for a few minutes, and this time can vary from one IPO to another. Before initiating their application, investors should ensure that their net-banking credentials are working correctly and have enough funds in their account.

How to Check the IPO Allotment Status?

Investors will be required to enter their PAN, Name, Address, Email ID, Mobile Number, select the number of shares they wish to purchase and place a bid price for these shares. They should ensure that they have chosen a valid Bid Price to consider their application by the system.

If an investor has enough funds in their bank account but does not know how much quota they have been allotted, they can still go ahead with the purchase provided they enter a Bid Price for the same. In such cases, it might take a day or two before the system allocates the shares in your account, depending upon the information furnished.

Application Form Entities

The application form on the linkintime IPO has the following details:

Agent Details: This form is to be filled up by the broker or any other person who wants to become a member of the Depository Participant. The applicant needs to give his name, address, PAN number, Mobile number, email ID and other details. Under this section, two addresses need to be given-one for communication from the exchange and another for communication from the IPO company.

Customer Details: In this form, the customer needs to give his name, address, age details and nationality. In case if the customer is a company, then its name, address, CIN number, and PAN number needs to be mentioned here.

Allotment Application form: Here, you need to give your details, including name, gender, father's name, and date of birth. Apart from this, you need to mention your present residential address, permanent address and contact details.

How has the government ensured the security of the IPO shares?

The Reserve Bank of India (RBI) has directed that the bids received in an IPO will be blocked and kept in a separate account with a scheduled bank to ensure that they are not used for other purposes. The bids will remain blocked till the completion of the allotment process, which usually takes about a week.

Every investor is given a few minutes to place an order for an IPO. This period is known as the 'Allotment period', and it begins from when the price band information is made available to all investors until the IPO closes for orders. The allotment period remains open only for a few minutes, and this time can vary from one IPO to another. Before initiating their application, investors should ensure that their net-banking credentials are working correctly and have enough funds in their account.

Wrapping Up

IPO allotment is all about the financial allocation for the preferred applicants under the share sale process. This guide explains to you how/when/where to check your Share allotment status.

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