Basis of Allotment is done after issue bid is closed & before actual allotment is done. It is the process in which how the allotment is done is finalized for different categories. Basis of Allotment is mainly important when the issue is oversubscribed, because all the applicants can't get allotment. Registrar have to select the applicants for allotment to shares reserved in each category.
In category applications are again seperated on the basis of lots(shares) applied. Lotwise applications & applied no. of shares percentage is calculated. On the basis of % then ratio is finalised for each category & lotwise applications.
Below is a chart which describes how shares is alloted & ratio for allotment in Retail Category.
Example - 1
Category - Retail
Reserved shares - 1,89,26,183
Lot - 65 shares
Approx. Total no of Applications - 10,73,971 (of which Retail Appl. @ Cut off price - 10,57,654)
No. of Shares applied for Retail Category - 11,91,57,935 (of which @cut off price - 11,64,45,355)
**** Figures given are sample purpose only (not actual )
**** Ratio for Allotment decided by Registrar in consultation with Stock Exchange eg. 68 : 247 (27.53 %) means from every 247 applications 68 applications selected for allotment.
Selection of application from every category (no. of shares applied) done seperately as per ratio. Ratio for lots (no. of shares applied) can be same or different but ratio %age is nearly about same.
The ratio & %age will be different for every IPO depending on the issue oversubscribed.
Good work ... keep giving such useful info
ReplyDeleteWHAT IS 68:247 ITS SIGNIFICANCE?
ReplyDeleteIt means for every 247 applications 68 applications selected for allotment, it is decided by stock registrar with consultation with Stock exchange. The figures may same or varies every category (no. of shares applied), but ratio %age is nearly about same.
DeleteHw they will select thoes 68 aplications ?
ReplyDeleteHow those 68 aplications are decided
ReplyDelete68 applications selected randomly
DeleteI have applied for 7 ipo's til now in 2016 only... I hv not got a single share alloted in all the ipos ... Is there any way so dt d chances of allotment are more ?? Lyk specific number of lots or so?
ReplyDeleteRather than applying max lots in one application, apply only 1 lot and apply more than multiple application with different PAN (incl. family members). If IPO is oversubscribed & u have applied 10 lots in 1 appl., u can get NIL or only 1 lot from 10 lots. But if u applied 5 applications, there is a chance that ur 0, 1, 2 or even all 5 applications selected for allotment.
DeleteKindly help...
ReplyDeleteI have applied going to kotak branch n filling d form 3ce ... N othr tym i have applied online going to kotak net banking through ASBA... Through dat if v have demat account den only v can apply...
ReplyDeleteHave u are teling me to apply ?
I am a beginer and dont have much knowledge kindly tell me clearly
ReplyDeleteDont u have a demat a/c, if not open demat a/c with any bank eg. SBI or ICICI or other also u can open demat a/c with other brokers. Through Demat u can directly apply for IPO from demat trading a/c. No need of filling any form.
DeleteI mean how are you telling me to apply ... Wat procedure
ReplyDeleteThrough demat account only i have applied...i have demat in kotak n i applied through kotak net banking asba .. Der v need to giv demat account details and aply... But how u are telling to apply through pan number ?
ReplyDeleteThrough net banking u can make 5 applications.
DeleteOk ok next tym i vl try dat... Thank u...
ReplyDeleteare you a trader ?
ReplyDeleteYes,I am a regular trader in Equity & Options from last 7 years
DeleteWowww....! Dts grt
ReplyDeleteWat shd v stdy for technical analysis ?
ReplyDeleteKeep track about Global & Local Markets, stocks you are interested. There are many sites from where u can find details.
DeleteKeep these points in Mind
1. Before Investing or Trading Strictly Decide ur Profit level or Stop Loss
2. Do not blindly believe predictions given by stock experts on channels
3. Always invest or trade in Blue chip stocks & Ignore trading in cheap value & volatile stocks i.e. below 20
4. Regularly keep track about company & sector news and also global events which affects stock markets
5. Check Company's Financial position, share holders position, corporate actions
Moneycontrol.com where u can get max info about market, Technical analysis, Individual stocks Details, sectorwise news etc.
Thanx a lot... Actually i have bought max financial at d price of 592 its cmp is 522 nw can u suggest me weather to hold it or sel ?
DeleteVolatile stocks below 20 means
Delete20 is for cheap value stocks
DeleteVolatile stock means stocks who flactuates in circuits or moves +/- 5% or above
As per the above allotment process example in excel, all those randomly selected on the basis of 68:247, they all will get 65 shares, i.e. one lot each. It always does not happen like that, people get 2,3 or 4 lots as well. Have you not considered that ??
ReplyDeleteif no. of applications subscribed more than 1.x then no one can get more than 1 lot.
DeleteBut if no. of applications is less than 1.x then it is allotted on the basis of lots.
Initially 1 lot is allotted to each application, then balance allotment is calculated again for
applications applied more than 1 lots.
If balance allotment is more than no of applications applied more than 1, then each application
is alloted additional 1 lot.
But if balance allotment is less, then 2nd lot allotted randomaly for additional applications.
same process applied for each additional lots.