How to increase chances of IPO allotment:

Investing in an IPO (Initial Public Offering) may be harder than it seems, as the likelihood of getting an allotment can be pretty slim. But instead of leaving everything up to luck and being disheartened later, you can follow some ways to enhance the chances of allotment. Read on to find out how to increase IPO allotment chances.

Tips to increase your chances of getting an IPO

Avoid making a large application: If you are wondering how to increase the chance of IPO allotment, a large application may not be the answer. All applications are seen as equal, so making a large application has no direct benefit unless you are applying for a large IPO. 

Also Read: IPO Frenzy: Are You Aware Of These Key Terms Related To IPO?

• Don’t leave things till the last minute:

Waiting till the last moment can complicate things. It is advisable to apply for the IPO within the first two days. This eliminates the chances of forgetting to apply on the last day, encountering technical glitches, or having to deal with heavy traffic at the last moment. 

• Always bid at the cut-off price:

Bidding at the cut-off price can increase your chances of getting the allotment as it shows your willingness to buy the stock at that price. If you bid at a price far from the cut-off, it is likely to reduce your chances of allotment. 

• Apply from more than one Demat account:

If you are wondering how to apply for an IPO, it can be done through a Demat account. However, you can only apply for an IPO against one PAN. So, to increase the chances of allotment, you can apply for the same IPO from other Demat accounts linked to the PAN of your family members or friends. 

Also Read: Different Types Of IPO Investors

• Purchase shares in the parent company:

Applying for the parent company’s stocks puts you in the shareholder category, and this has a higher weightage during IPO allotment. Even buying a single share of the parent company from the same Demat account can substantially increase your chances.

• Verify all details carefully: 

The last of the IPO steps is to verify all your details before submitting them. Take a close look at your name, email address, Demat account number, PAN, category of investor, and other related details. If there is an error in your application, you risk losing out. So, make sure you go through the information submitted and rectify any errors.

• Remember to approve the mandate request:

Applying for the IPO is only half the task done. You also have to accept and approve the mandate request. When you apply for an IPO, the broker or bank will send you a mandate request. You need to approve this to be considered for the IPO allotment.

Also Read: How do IPOs differ from NFOs?

Last words

Now that you know how to subscribe to an IPO the right way, go ahead and bid for one of the upcoming IPOs in the market. Do bear in mind that there is no guaranteed way to get an allotment; your luck does play a crucial role. However, following the simple steps listed in this article can boost your chances.