How to Check IPO Allotment Status, What is GMP and Why is New IPO Allotment Necessary
Initial Public Offering is a process through which a private company offers its shares to the public for the first time and makes its private company public. So it makes its company’s shares available to the public for investors through IPO. The main purpose of an IPO is to raise capital, so that money can be collected for the company’s capital and for the company’s expansion, research, and other business activities.
Before launching an IPO, a company is considered a private company. As a private company, the company does business and continues to grow with a relatively small number of shareholders which include early investors like the founder, family and friends and professional investors like venture capitalists but after launching an IPO, it becomes public and this way the general public gets to connect with the company and also helps the company to raise funds which is required to expand its business.
- An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.
- Companies must meet requirements by exchanges and the Securities and Exchange Commission (SEC) to hold an IPO.
- IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market.
- Companies hire investment banks to market, gauge demand, set the IPO price and date, and more.
- An IPO can be seen as an exit strategy for the company’s founders and early investors, realizing the full profit from their private investment.
you can check the ipo allotment status online through tha registration website stock exchange platforms.to do so you will head the platform information.
- Pan number
- Application number
- Dp/client Id (For Demant account holder)
What is the New IPO allotment process
The IPO allotment mechanism depends on the investor category and IPO subscription levels.If an IPO is undersubscribed in each investor category, all investors with valid applications will receive full allotment. An IPO must receive at least 90% aggregate subscription to be successful.If an IPO is oversubscribed for one category and under-subscribed for another category, the oversubscription can be adjusted with the under-subscribed portion of the other category except QIBs.In case of oversubscription, the issuer will allot shares based on a lottery system or proportionately based on the investor category. Let’s take a look at the IPO allotment criteria for each investor category.When a company launches its new IPO, the general public applies for it and after this the company allots shares to the applicants in the New IPO allotment process. This process is conducted by some major registrars, such as:
Whenever an IPO receives more applications than its target number, the shares are allotted by the companies through a lottery system.
- Link Intime India Pvt Ltd
- Coffin Technologies Pvt Ltd
What is ipo allotment gmp
GMP (Grey Market Premium) means the additional value that reflects the current market price of the shares of any company’s new IPO. For example, if the issue price of an IPO is ₹200 and the GMP is ₹50, it means that the shares are trading at ₹250 (₹200 + ₹50) in the grey market. This helps investors know in advance which company to invest in or which company to leave.
When a company launches its IPO (Initial Public Offering), the focus of all types of investors is on its allotment and gray market premium (GMP). It is very important for investors to find out the allotment and understand the importance of GMP before investing in an IPO. This helps investors to decide through ipo allotment gmp ke which company has what growth.
How does GMP work?
The grey market is an unofficial market that remains active before the launch of a company’s IPO and till the listing and reflects all the key details about the IPO and the attendants of that IPO.
GMP (Premium)
- This is the additional price that companies ask investors to pay for IPO shares.
Kostak Rate
- This refers to the price at which a person is willing to sell an IPO application.
Listing Gain
- This refers to the profit expected at the time of listing based on the ipo allotment GMP and the issue price.
Importance of GMP
- Indication of demand for the stock GMP tells how much investors are excited about that IPO.
- Estimation of Listing Gain GMP gives a possible indicator of the potential profit (Listing Gain) at the time of listing.
- If GMP is high, then the possibility of listing gain is high.
- If GMP is low or negative, then there can be loss on listing.
IPO allotment date is the date on which the IPO allotment is announced by the registrar to the issue to the company. Investors can check the status of their IPO applications on the IPO allotment date. IPO allotment is an important event for the company which investors follow in oversubscribed IPOs where allotment is done by lottery. The registrar to the issue uploads the allotment result on its website, where investors can check their allotment status by entering the PAN number, IPO application number or demat account number. IPO allotment should be completed within five business days of the closing of the offer.
The IPO allotment process ensures fairness, as it is conducted based on SEBI guidelines, often through a randomized lottery system for oversubscribed IPOs.
SEBI has issued Circular No. CIR/CFD/14/2012 dated October 04, 2012 regarding use of a nationwide broker network of stock exchanges for public issues and submission of applications in electronic form (copy enclosed).
SEBI has, among other things, directed the exchanges to provide the following facility to investors to ipo allotment status check the status of their issue IPO applications on the websites of the stock exchanges itself to help them in making investments.
Accordingly, BSE has provided the facility to investors to ipo allotment status check the status of their issue applications on BSE website and NSC website.
SEBI has uploaded the application on BSE’s Book Building Software – IBBS. If the bid is uploaded on BSE IBBS platform, the investor will get a bid ID against each bid. Investors have to enter the combination of their application number and PAN number and select the issue name to ipo allotment status check application.
To check the ipo allotment status of an IPO, different steps have to be followed on different platforms such as Visit the IPO registrar’s website Visit the IPO registrar’s website (Fintech, Link Intime or others). Open the Fintech Link Intime IPO allotment page Go to the registrar’s website and select the option IPO Allotment Status.
Fill in your full details and you can check the allotment status. If shares have been allotted to you, then the information will appear there, otherwise it will not appear and there are many such options for investors to check their IPO allotment status.
IPO Allotment by Investor Category
- IPO Allotment to Retail Investors (RII)
Each retail individual investor (RII) gets allocated at least one lot; provided there are those many shares reserved for RII in the IPO and the number of RII applicants.
- IPO allotment in NII category
NII IPO investor category is divided in 2 parts
1.Small NII (sNII)
2.Big NII (bNII)
- IPO allotment in QIB category
The allotment to QIB investors will be made on a proportionate basis in case of oversubscription
- IPO Allotment to Employees
The allocation to employees will be made on a pro rata basis in the event of oversubscription.
- IPO Allotment to Shareholders
The allocation to shareholders will be made on a proportionate basis in the event of oversubscription.
- IPO Allotment to Anchor Investors
In mainboard bookbuilding IPOs, anchor investors are offered shares up to 60% of the QIB category. Of the 60%, one-third of the anchor investors’ share is reserved for domestic mutual funds.
FAQs in this subsection are presented under following 13 broad headings
1. Different kinds of issues
2. Types of offer documents
3. Issue requirements
4. Pricing of the issue
5. Understanding book building
6. Categories of Investors
7. Investment in Public/Rights issues
8. Intermediaries involved in the issue process
9. Guide to understand an offer document
10. SEBI’s role in an issue
11. Other terms
12. Additional information
13. Convertible Securities
The importance of IPO in India is increasing day by day. In the last few years, many big companies like Tata Steel, Nykaa, and Mamta have raised huge capital by going public through IPO. IPO in India is launched on stock exchanges like NSE and BSE. Through this, companies not only raise capital, but they also get trust from investors. And when the public gets a new IPO allotment, they also become a part of that company.IPO allotment is an important aspect of the IPO (Initial Public Offering) process, as it determines whether an investor is allotted the shares they applied for during the IPO subscription period.
