Ipo

#1
I have been wondering how the companies issue shares for IPO, I mean the basis of issuing shares if the IPOs are oversubscribed. Is there any standard laid down by Stock Exchange.

1. I had applied for 600 shares of IDFC at the cutoff rate i.e. 34 but I did not get any shares.
2. Do they look at those application where more than 1000 shares have been requested.
3. Do they issue the shares based on first come first served basis, I mean those who apply first will be considered first.
4. Does the companies have different allotment system.
5. Is there any specific rules by Stock Exchanges as to issue of shares.

Traderji, I would request your valuable knowledge on this. I would request members also to put an insight into IPO shares distribution by companies. These queries are in the minds of many boarders here but no information is available anywhere.
 
#4
I don't know what happens... for the last 3-4 times I applied thru ICICIdirect and not get a single share. Whereas some of my friends applied manually (paper form) and they got a few.
 
#5
Guys,

Check out the basis of allotment at rupya.com. I wonder why you didnt get any alloted...id applied for 2k and i got 380....as explained in the allotment details........
 
#6
this is the procedure of IPO allottments in case of oversubscriptions. hope it helps -

allotment procedure for retail investors: BASIS OT ALLOTMENT RETAIL INVESTORS : EXAMPLE CASE = limit 1 lac minimum lot 100 shares price range 55 to 60 scrip XYZ
FIRM ALLOTMENT : when the issue is fULLY / PARTLY SUBSCRIBED firm allotment is made for no. of shares as applied by you .PROPORTONATE ALLOTMENT : when a issue is OVERSUBSCRIBED prportionate allotment is made . i.e. if issue oversubscribed 6.5 times in retail then divide your application quantity by 6.5 and shares will be alloted in multiple of 1 share above minimum lot i.e. 108,123,and so on. however persons applying between 100 to 600 shares if they divide by 6.5 then the shares will work out less than 100 ,since minimum allotment has to be 100 shares instead of rejecting these applications applicants between 100 to 600 shares will be allotted 100 shares by lottery wether u have applied 100 or 600 shares . ofcourse probability for success in lottery will be better for those applying 600 shares over those applying 100 shares. now worst case issue oversubscrbed say 17 to 20 times then one will get allocation of minimum lot of 100 shares alloted by lottery wether have applied for 100 shares or full 1600 shares with different probability chances i.e. 1600 application will have better chance over 100 share application in lottery. Hope u will find this informative,and will understand the allotment procedure . You can find out yourself chances of getting no. of shares by viewing cutoff bid at bseindia dot com for book built IPO late at 9 PM on closing day . ONLY RETAIL ,&EMPLOYEES & EXISTING SHARE HOLDERS APPLYING BELOW 1 LAC are allowed to bid at cut off . cut off bid is open price bid with an agreement that whatever price is determined shall be applicable to retail bidders,for this they pay higher cap amount i.e. 60 in this example case
 

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