Top 7 ways to increase your chance of getting IPO allotted to you: Here we have listed 7 effective ways you can follow while applying for an IPO. It will surely increase your chance of getting IPO allotment.
Nowadays here in India, we can say that it is the season of IPO, IPOs are raining like nothing else, so many companies are coming with their IPO and getting listed on stock market and raising funds in the current bullish market.
Lot of people are trying to apply for IPO, but not all of us are getting the allotment of the IPO. that’s why we have listed few effective ways which will increase your IPO allotment chance. Still we can’t give you any assurance that IPO will be allotted to you, these are just best practices which should be followed while applying for an IPO.
Table of Contents
Apply from multiple demat account
If you have a capital then it’s better to apply from multiple Demat accounts. You can apply for an IPO from your family member’s demat accounts, this increases the possibility of getting IPO allotment.
Nowadays the retail quota of IPO is being decided at very low portion and in addition to this the IPO is getting subscribed too many times, due to this very few accounts get the allotment of IPO.
If we apply on the name of multiple members for an IPO, atleast one should get the allotment of IPO, even this doesn’t assure that IPO will get allotted to at least one members.
Do not apply from multiple demat Accounts linked to same PAN No.
If you are applying for an IPO and you want to apply from multiple accounts then you have already increased the possibility of IPO allotment for you.
But do not apply for IPO from multiple accounts linked to same Pan No.
This is very common mistake people are doing these days, that one person have multiple demat accounts registered with different brokers ( Zerodha, Upstox, etc..) And they apply for IPO from all the brokers, eventually these kind applications gets tracked and never gets an IPO allotment.
Bid on Cut Off Price
Always apply at Cut-off price, as these days IPO is getting over subscribed, there is no chance that IPO share price will be decided at lowest/middle on IPO price band scale.
- Cut-off Price = Highest Price of 1 Share
Hence apply at Cut-off price for IPO and it will decrease your rejection chance of IPO allotment because you are already ready to buy at highest/cut-off price.
Avoid applying on last day
Try to avoid applying on last day since so many users are trying to apply for IPO and making their payments online, there will be huge traffic on company/bank servers and your application may not be proceed in case of any technical problem occurred.
Review Application Details
Most of the IPO applications are getting rejected due to the mismatch of user’s credentials (name) in demat account information and banking information.
Make sure that the key details of the person is same through out all banking, demat information.
Apply for single lot/minimum shares
As we have already mentioned that nowadays IPO is always getting over subscribed. The company has to treat all retail investor equally, hence they will try to make sure that most of the users should get IPO allotment.
If we apply for multiple lots then again there might be probelm in getting IPO allotted to you, hence applying for single lot is the effective way to apply for IPO
Buying Parent company’s shares and availing shareholder quota
Many companies have shareholder quota for their IPO. There are less applications being filed under shareholder quota compared to retail quota. So if you apply under shareholder quota then your chance of getting IPO allotment will be high.
To avail benifit of shareholder’s quota for IPO, you can buy the shares of that company’s parent company, then you will fall under existing shareholder category and then go for IPO.
For ex : SBI and SBICARD, the existing shareholders of SBI had the benifit of applying for SBICARD IPO.