ALLOTMENT · 4 MIN READ
What happens when an IPO is oversubscribed?
Oversubscription means valid demand is greater than the shares available. It does not mean shares are divided equally among every applicant.
Invalid applications are removed
The registrar reconciles exchange bids, PAN, demat and payment records. Duplicate applications, failed mandates and other technical rejections do not enter the final allotment pool.
Categories are handled separately
Retail, NII and QIB demand is compared with the shares reserved for that category. Heavy retail demand does not directly reduce the QIB allocation, and vice versa.
Retail is considered for a minimum lot
When there are enough shares, valid retail applicants may receive at least one minimum lot. When applicants exceed the available minimum lots, not everyone can receive shares.
The computerized draw
The basis of allotment is finalized with the designated stock exchange. A computerized, randomized selection identifies successful retail applications for one lot. Applying for more retail lots does not guarantee allotment when a draw is required.
Other categories
Institutional and non-institutional categories can use proportionate allocation or other rules specified for the issue. It is inaccurate to describe every IPO category as a lottery.
After the draw
Successful applicants are debited only for allotted shares and receive them in demat. Other blocked amounts are released, and the registrar publishes allotment status after approval.
Reviewed for clarity · 2026-11-03