Increase Chances of IPO Allotment: IPO is raining in the current financial year 2021-22. Market analysts estimate that the IPO environment will remain the whole year in the current financial year. In this financial year, 40 more IPOs worth Rs 70 thousand crore can come. There is tremendous enthusiasm among investors towards IPO but allotment of shares is not possible to all. Some investors complain that they put in many applications but they never get allotment of shares. Some people put only one application but they get shares. The process of allotment of shares is automated but by adopting some methods, you can increase the chances of your name appearing in this list.
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In this way, the possibility of share allotment can be increased
- Avoid over bidding on large applications: SEBI’s allotment process is such that all applications (retail applications) of less than Rs 2 lakh are treated as equal. Therefore, in IPOs which are highly likely to be oversubscribed, investors should place minimum bids through multiple accounts instead of placing large bids. With this, you can get an opportunity to invest the remaining money in other IPOs as well.
- Place bids from multiple accounts in a single IPO: Do not place the maximum bid for an IPO from a single account. Investors should apply through multiple accounts for oversubscribed IPOs. This increases the chances of allotment of shares.
- Place a bid at the upper price of the price band: Bid at the upper price of the price band fixed for the IPO of a company. This increases the chances of getting allotment.
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- Avoid subscribing on the last day: Investors have a few days to subscribe to the IPO. Some investors try to subscribe the IPO on the last day, which should be avoided. Last minute bidding may result in the bank account not responding due to high subscription of HNIs and QIBs or the bids may not be placed due to any other technical issue. In such a situation, if you have decided to subscribe to the IPO, then do not wait for the last minute after the issue opens.
- To place bid through bank account: You can bid for the IPO through the platform of your brokerage firm. Apart from this, banks also provide this facility. Investors can bid for the IPO through ASBA (Application Supported by Blocked Amount) through the bank. Bidding through ASBA virtually eliminates the possibility of the application getting rejected due to technical reasons.
- Buy shares in parent or holding company: This method is not effective in all IPOs. This is effective only for those IPOs where the parent company of the company that brought the IPO is already listed in the market. Having a single share of the parent company in the demat account makes the investor eligible to apply under the shareholder category and then the chances of allotment of his shares increase. Apart from the shareholder category, the investor can also apply from the retail investor category. The chances of allotment increase if you apply from both the categories.
IPOs of 16 companies that have come so far in FY22
In the current financial year 2021-22 so far, IPOs of 16 companies have come. Companies have raised Rs 30,666 crore through these 16 IPOs. Comparing this with the entire last financial year 2020-21, the IPO market is very excited because in the last financial year, 30 companies had raised Rs 31277 crore through IPO for the whole year. Market analysts expect the IPO environment to continue throughout the year in the current financial year. In this financial year, 40 more IPOs worth Rs 70 thousand crore can come.