Before understanding the process of IPO allotment, let us first understand what is the category of IPO investors.
There are 3 types of investors in an IPO:
Allotment of the shares is processed a few days after the bidding of the shares in the IPO. What is OVERSUBSCRIBE in IPO? OVERSUBSCRIBE means that if there is a demand for more shares than the number of shares the company brings in the market, it is called oversubscribe. E.g. If a company bids 100,000 shares to retail investors for an IPO and the demand for shares is 200,000 shares, it is called oversubscribe.
The more oversubscribed an IPO is, the less likely it is to get an IPO.
There have been times when you bid for an IPO but you don’t get it, but your friend or relative gets it, so it’s all a lottery system.
Don’t forget to write in the comments how you feel about today’s blog.