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Can I bid for more than cut-off price in IPO?
Investors can invest more than Rs. 2 lakh. A minimum of 15\% of the IPO is reserved for the RII category. Investors from this category cannot bid at the cut-off price.
Should you bid at cut-off price?
Bidding at Floor price and above ensures that the bids will be considered. Allocation in such cases shall be subject to final price discovery. Bidding at “cut-off” ensures that the retail investor will get allotment where the allotted quantity will depend upon the demand at various price points.
How IPO is allotted when oversubscribed?
So, when it comes to allocation in case of oversubscription, the total number of shares available for retail investors is divided by the minimum lot size. In other words, an investor who bid for just 1 lot will be treated on par with another investor who bid for 10 lots. This way, fairness is ensured in IPO allotment.
In other words, the IPO has been oversubscribed by 20 times and the number of investors has also gone up by 10 times. In this scenario, all investors cannot be allocated at least one lot each as stipulated by the SEBI. Hence, the allocation will be based on a computerised lottery draw.
Can I apply IPO in HNI category?
Apply IPO in HNI Category A retail investor can apply for IPO shares in the HNI category using the online ASBA IPO Application facility offered by the net-banking website or app of the bank. HNIs cannot use UPI-based IPO applications to apply in the NII category as an HNI investor.
Does IPO allotment depend on broker?
IPO allotment doesn’t happen on the basis of who applied first or the first come, first serve basis. If the IPO has not received good response from the investors and it is under subscribed then you may get allotted as many lots you have applied for.
How does IPO decide cutoff price?
An option is given to retail investors to apply at a cut-off price in IPOs. This means the IPO applicant doesn’t have to choose a price. They can simply choose the ‘cut-off’ option and the shares are allocated at the cut-off price. For example; a company came up with an IPO with a price range of Rs 80 to Rs 90.
Oversubscription is the most common reason for non-allotment of shares in an IPO. Here, each applicant has an equal opportunity to be allotted the shares. If your application is not picked in this lottery system, then shares are not allotted to you and your application amount is refunded.
Is oversubscribed IPO good?
An oversubscribed IPO indicates that investors are eager to buy the company’s shares, leading to a higher price and/or more shares offered for sale.