IPO allotment is the process of deciding who gets shares when the bids come in. If an IPO receives fewer bids than shares on offer, every valid applicant gets what they asked for. If it is oversubscribed (bids exceed shares) retail applicants go into a computerised lottery for one lot each, while larger categories are scaled down proportionately.
What does "oversubscribed 20 times" actually mean?
It means investors bid for 20 shares for every 1 share available. Suppose Deccan Ceramics, a fictional tile maker, offers 10 lakh shares to retail investors and receives valid retail bids for 2 crore shares. The retail portion is oversubscribed 20 times, and there is simply no way for everyone to get shares. Allotment is the rulebook for sharing the shortage fairly.
Each category (retail, HNI, QIB) has its own pool and its own subscription number. The retail portion being 20x oversubscribed while QIB is 80x are two separate contests.
How does the retail lottery work?
The rule for the retail category tries to spread shares across as many people as possible. First, the registrar works out how many applicants can be given the minimum, one lot each. Then:
- If even one-lot-each is impossible (as with Deccan Ceramics at 20x), a computerised draw picks which applicants receive one lot. Everyone else gets nothing.
- The draw treats applications, not money, as tickets. Farhan applied for 13 lots (about ₹1,95,000) and Divya applied for 1 lot (₹15,000), in a heavily oversubscribed IPO, both hold exactly one ticket in the lottery, and if either wins, the prize is one lot.
That is the counterintuitive part: within retail, bidding more money does not raise your odds once the issue is heavily oversubscribed. What can genuinely and legitimately affect your chances is covered in can I improve my IPO allotment chances?
What about HNI and QIB applicants?
Those categories use proportionate (pro-rata) allotment: if the bucket is 10x oversubscribed, valid applicants receive roughly one-tenth of what they bid for, subject to minimums set by regulation. So a large application in the HNI bucket does scale (you get a slice sized to your bid) but your capital is blocked on the full amount in the meantime.
Why did I get nothing even though others did?
Three common reasons. One: plain lottery luck, at 20x oversubscription, roughly 19 of 20 retail applicants must go empty-handed. Two: your bid was invalid, priced below the final issue price, duplicate PAN, mismatched details. The full list is in why was my IPO application rejected? Three: you applied in a category whose oversubscription was worse than you assumed.
After allotment is finalised, shares hit the winners' demat accounts, and blocked money is released for everyone else. Timelines are in when will I get my money back after an IPO? You can check your own result on the registrar's portal or on Rupeezy app once the basis of allotment is published.
Things to keep in mind
- In a heavily oversubscribed IPO, retail allotment is a genuine lottery, no broker, app, or timing trick changes the draw.
- Within retail, one large application holds the same lottery ticket as one small application; the ₹ amount stops mattering past one lot.
- Not getting an allotment costs you nothing but time. The blocked money is released in full.
- Oversubscription measures demand in the IPO, not how the stock will behave after listing. Heavily oversubscribed issues can still list flat or down.
Read next
What is grey market premium (GMP), and should I rely on it? — The unofficial number everyone quotes before listing, and its limits.