Many investors apply for IPOs with the hope of securing allotment, only to be disappointed when their application doesn’t get selected. Not getting an IPO allotment is common, especially when the IPO is oversubscribed. However, instead of losing hope, you can use this experience to refine your approach. With a smart strategy and careful application, you can significantly improve your chances of getting an allotment.
In this blog, we’ll share practical tips and actionable strategies to help you navigate the IPO allotment process effectively.
1. Apply for a Single Lot
When applying under the retail category, the lottery system ensures fairness among all applicants. Here’s why applying for a single lot works:
- In oversubscribed IPOs, allotment is done via a lottery among single-lot applicants.
- Applying for multiple lots does not give you an edge; instead, it reduces your chances.
💡 Tip: Stick to a single lot application for better odds in the lottery.
2. Use Multiple Accounts
To maximize your chances, leverage family members’ demat accounts.
- Open separate accounts for family members and apply from each one.
- Each account must have a unique PAN and UPI ID.
- Avoid multiple applications using the same PAN, as this leads to rejection.
💡 Tip: More applications from different accounts mean more lottery entries.
3. Target IPOs with Less Competition
Popular IPOs often face extreme oversubscription, reducing your chances.
- Research IPOs with strong fundamentals but less buzz.
- Smaller or mid-sized IPOs with good growth potential can be less competitive.
💡 Tip: Sometimes, the lesser-known gems can yield better results.
4. Approve UPI Mandate Immediately
For applications via UPI, timing is crucial.
- Approve the UPI mandate as soon as you apply.
- Delayed approvals often lead to invalidated applications.
💡 Tip: Keep your UPI app ready and approve mandates without delay.
5. Apply Early
Procrastination can cost you.
- Submit your application on the first or second day of the IPO opening.
- Late applications face technical issues and higher competition.
💡 Tip: Early birds avoid glitches and gain smoother processing.
6. Choose a Reliable Brokerage Platform
Not all brokerage platforms are created equal.
- Opt for platforms known for fast and efficient processing.
- Some brokers have better infrastructure for handling UPI mandates and applications.
💡 Tip: A good platform can streamline your IPO journey.
7. Apply Under the Retail Category
Make sure you’re applying under the correct investor category.
- Retail Individual Investors (RII) typically have 35% of shares reserved in many IPOs.
- ASBA (Application Supported by Blocked Amount) should be filed accurately.
💡 Tip: Double-check your application category for eligibility.
8. Focus on Smaller IPOs
Smaller IPOs often have fewer applicants, giving you better odds.
- Oversubscription is less likely, and allotment chances are higher.
💡 Tip: Don’t overlook smaller IPOs—they can be hidden treasures.
9. Keep Accounts Ready
Preparation is key to a smooth application process.
- Ensure your demat and bank accounts are active and functional.
- Check for errors in documents to avoid rejections.
💡 Tip: A ready account means less stress during the application process.
10. Think Long-Term
Not every IPO is about quick listing gains.
- Focus on the company’s growth potential and long-term value.
- Sometimes, patience pays off more than instant profits.
💡 Tip: Invest with a mindset for future returns, not just immediate gains.
What If You Don’t Get Allotment?
Missing an allotment isn’t the end of the road. Consider these alternatives:
- Buy Post-Listing: Many great stocks are still affordable after listing.
- Diversify: Explore mutual funds, ETFs, and fixed-income options.
- Stay Disciplined: Good investment opportunities are always around the corner.
Conclusion
IPO allotment is largely based on luck, but adopting these strategies can significantly improve your chances. By planning smartly, applying early, and diversifying your approach, you can turn the odds in your favor.
Remember, every missed allotment is a stepping stone to better preparation for the next IPO. Stay positive, keep learning, and make your next application count!
Do you have a favorite IPO strategy or a question about the process? Share your thoughts
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