Every investor would love to have the desired IPO allotment but unfortunately many don’t. One can follow simple tips like making smaller applications, applying through multiple demats, not waiting for the last second, etc, to increase the chances.
IPOs are thrilling adventures. And getting the one you wanted is the best feeling. If successful you can generate capital gains for the years to come.
The only underlying issue is that they are over-subscribed. Thus, eliminating most of the investors who applied on-time. What generally happens is people who applied through multiple applications don’t get any allotment and those who did with one demat get an IPO allotment.
You cannot blame the company or other investors for it. The process is 100% automated and it is like a lucky draw.
Strategies to Get an IPO Allotment
The main question people ask is- Are there other strategies that will improve the chances of getting an allotment? Let’s look at some of them.
- Try To Avoid Large Applications
SEBI has a rule that retail investors below Rs. 200,000 will be treated the same. So, if the size of the IPO is large, then a big application might be considered in case of oversubscription. Otherwise, smaller applications are considered best for a higher chance of allotment.
- Use Multiple Demat Account
Another strategy can be to apply using multiple demat accounts. It increases the chances and if lucky you might get an allotment in more than 1 account. For example- If you apply with 6 accounts, the likelihood of getting successful increases.
- Don’t Make Last-Minute Applications
Never commit the mistake of relying on HNI and QIBs before applying. It will give no benefits but delay your application until the very last moment. What if you miss it? Sometimes banks do not process payments or there can be network issues. It is best to apply on time.
- Avoid Any Mistakes in the Application
When you fill out the IPO application be very careful with the details. Check your name, account number, bid price, category, and other important information. You don’t want your form to be rejected because of minor mistakes.
Thus, by following these simple strategies you are improving your chances of getting an IPO allotment.