- Summary
- IPO shares are allotted after an issue closes, based on valid applications, shares available in each investor category and the applicable SEBI rules.
- For many mainboard book-built IPOs under Regulation 6(1), at least 35% is available to retail investors, at least 15% to NIIs and up to 50% to QIBs. Regulation 6(2) issues follow a different allocation structure.
- If there are not enough retail minimum lots for all eligible applicants, successful applicants are selected through a draw of lots.
- Retail investors can apply for up to ₹2 lakh in a mainboard IPO, but an application does not guarantee allotment.
What Is the Basis of Allotment in IPO?
The basis of allotment in an IPO is the process by which the number of shares each eligible applicant gets is determined after the IPO closes. It is subject to the category-wise reservations in the issue, the applicable SEBI regulations and the demand for shares.
When an IPO receives more applications than there are shares available, not every applicant will be able to take up the full amount they requested. The registrar will process the applications and produce the allotment proposal, which will be finalised with the issuer, lead manager and the designated stock exchange in accordance with the relevant rules.
The Basis of Allotment document will explain the final allocation of shares across the various investor categories. It will show the number of valid applications, the number of shares offered, the subscription levels and the allotment ratio or the minimum lot allocation.
Who Prepares the Basis of Allotment?
The basis of the allotment is settled via coordination between the registrar, the book-running lead manager and the relevant stock exchange.
Role of the Registrar to the Issue
The registrar to the issue handles the processing of applications and subscription data received via the relevant systems. They check the application details, identify any invalid or duplicate applications where appropriate, reconcile the bids and prepare the proposed basis of allotment.
Role of the Book Running Lead Manager
The Book Running Lead Manager (BRLM) runs the IPO on the issuer’s behalf. It is responsible for co-ordinating with the registrar and the stock exchange, ensuring compliance with the relevant regulations and that the proposed allotment is in accordance with the terms disclosed in the issue.
Role of the Stock Exchange
The designated stock exchange reviews and approves the basis of allotment in conjunction with the issuer, registrar and lead manager. The approved basis of allotment is then used to effect the share credit and fund release.
Allotment Categories
The following table shows the allocation structure commonly used for mainboard book-built IPOs under Regulation 6(1) of the SEBI ICDR Regulations. IPOs under Regulation 6(2) follow a different allocation structure, so investors should check the relevant offer document.
Retail Individual Investors (RIIs)
For a book-built mainboard IPO, a retail individual investor would normally be applying for shares worth no more than ₹2 lakh. If the retail portion is oversubscribed, then applicants are not automatically allocated the number of shares they have requested. The allotment is subject to the minimum bid lot and the number of shares available in that category.
Non-Institutional Investors (NIIs)
Non-institutional investors are those whose bids are above the retail investment cap and who are not applying as QIBs.
The NII portion is divided into two subcategories:
- Small NII (sNII): Applications above ₹2 lakh and up to ₹10 lakh.
- Big NII (bNII): Applications above Rs 10 lakh.
Generally, one third of the NII is allocated to sNIIs and two thirds to bNIIs. Any undersubscription and the consequent adjustments are dealt with in accordance with the relevant regulations and issue terms.
Qualified Institutional Buyers (QIBs)
Qualified institutional buyers are institutional investors who are eligible as per SEBI’s criteria. These would include mutual funds, insurance companies, banks and eligible foreign portfolio investors.
Allotment within this category generally follows proportionate allocation rules, subject to the applicable provisions.
Category Reservation Table
The following table sets out the typical structure for a mainboard book-built IPO. The actual reservation and allotment terms should be checked in the relevant offer document.
| Category | Reservation | Investment band | Allotment method |
| Retail individual investors | At least 35% under Regulation 6(1) | Up to ₹2 lakh | Minimum bid lot subject to availability. Draw of lots applies where there are not enough minimum lots for all eligible applicants. |
| Small NII | One-third of the NII portion | Above ₹2 lakh and up to ₹10 lakh | Minimum NII application size subject to availability, with draw of lots where required. Remaining shares, if any, are allotted proportionately. |
| Big NII | Two-thirds of the NII portion | Above ₹10 lakh | Minimum NII application size subject to availability, with draw of lots where required. Remaining shares, if any, are allotted proportionately. |
| QIBs | Up to 50% under Regulation 6(1) | Eligible institutional bidders | Generally proportionate, excluding permitted anchor allocation. |
| Shareholder reservation | Where provided | As stated in the offer document | As specified in the offer document |
| Employee reservation | Where provided | As stated in the offer document | As specified in the offer document |
| Anchor investors | Part of the QIB portion | Eligible anchor investors | As prescribed under the applicable anchor-allocation framework |
IPOs made under Regulation 6(2) follow a different structure, with at least 75% available to QIBs, up to 15% to NIIs and up to 10% to retail investors.
Shareholder and employee reservations are not available in every IPO. The eligible shareholders, the record date, employee eligibility, application limits and reservation sizes will all be issue-specific. Anchor investors form part of the QIB allocation rather than being an additional amount to the net offer.
Allotment Methods Based on Subscription Levels
The allotment method is based on the number of valid bids a category receives against the number of shares available to it. Subscription levels in themselves do not guarantee that an applicant will be allocated shares.
Oversubscribed IPO
An oversubscribed IPO is said to be oversubscribed when the demand for shares in that category exceeds the number of shares available in that category.
For instance, if a category has shares available for 10,000 minimum lot applications and receives 40,000 eligible applications, it won’t be able to issue a lot to each applicant. The relevant allotment rules will determine how the lots are allocated.
For retail investors, the minimum lot rule and a computerised lottery will determine who gets the shares. For the NII and QIB categories, proportionate allocation will generally apply, subject to the relevant rules and issue terms.
Fully Subscribed IPO
An IPO (or investor) category is said to be fully subscribed when the valid demand equals the number of shares available. Eligible applications are then processed in accordance with the allocation rules for that category and the issue terms.
Undersubscribed IPO
An IPO or category is said to be undersubscribed when there is less valid demand than the number of shares on offer.
In this case, applicants who are eligible may receive the amount they have applied for (subject to the number of shares available, the bid price and the issue terms). Any unallocated amount may be reallocated or adjusted between the categories where the rules and offer document allow it.
If it fails to meet the relevant minimum subscription or other qualifying conditions, it can be cancelled and the application funds released in accordance with the rules.
The Minimum One Lot Rule for Retail
The minimum lot rule is a key element of the retail IPO allotment process. Under the current mainboard IPO allotment rules, the intention is to allot at least one minimum bid lot to each eligible retail applicant where there are sufficient shares available. If there are not enough shares to allot one lot to each eligible applicant then the process as prescribed may involve the use of a computerised lottery.
For example, if an IPO has 5,000 minimum lot allotments available and 20,000 eligible retail applications are received, there simply won’t be enough shares to give one lot to each of the applicants. The allotment process will work according to the prescribed method and the remainder of the eligible applicants will get nothing.
Mainboard vs SME IPO Allotment
Mainboard and SME IPOs have different application and allotment arrangements. Investors must not assume that the retail minimum lot rules for a mainboard issue will be the same for an SME issue.
| Basis of comparison | Mainboard IPO | SME IPO |
| Investor application structure | Retail applications can generally be made for up to ₹2 lakh | The revised framework uses an individual-investor category with a minimum application of two lots and a value above ₹2 lakh, subject to the applicable rules and issue terms. |
| Minimum application | Depends on the price and lot size, within the relevant category limit | Under the revised framework, the minimum application is structured around at least two lots and an amount above ₹2 lakh |
| Retail minimum-lot lottery | Can apply when the retail category is oversubscribed | Do not assume the same retail category and lottery framework applies |
| Category allocation | Generally follows the mainboard book-building allocation framework | Follows the SME issue’s applicable regulatory framework and offer terms |
| Liquidity considerations | Depends on the individual security and market conditions | Liquidity may be more limited, and lot sizes can require a larger investment |
How to Check Your IPO Allotment Status
Investors can check their IPO allotment status once the registrar has published the results. The status page will indicate whether shares have been allotted and, where relevant, the quantity of shares allotted.
Step 1: Find the IPO Registrar
Check the IPO offer document or the official issue information to find the registrar. The registrar’s website is generally the most straightforward place to go to check the final allotment result.
Use the registrar named in the IPO’s offer document. MUFG Intime India and KFin Technologies are examples of firms that provide IPO related services for issues for which they are appointed as the registrar. Always refer to the official status page for the particular IPO rather than assume that one registrar will be the registrar for all issues.
Step 2: Open the Registrar’s Allotment Page
Go to the registrar’s website and find the IPO allotment status section. Pick the appropriate issue from the list of IPOs available.
Step 3: Enter Your Application Details
Depending on the registrar’s page, you may be asked to enter details such as your PAN, your application number or your demat account details. Enter them exactly as they appear on your application.
Step 4: Submit the Form
Complete any verification that the page may require and submit the form. The outcome will be that it will tell you whether or not an allotment has been made and,d if available, the number of shares allotted.
Step 5: Check the Exchange Information if Needed
You can also use the BSE IPO application status facility or the NSE IPO bid verification facility to check the information that is available via the exchange. NSE’s bid verification facility is designed to assist investors in verifying their bid details and is not in any way a substitute for the registrar’s final allotment result.
If the status isn’t yet available, then check the registrar’s published timeline and come back later. A pending result in itself doesn’t mean the application has failed.
What Happens to Your Money If You Don’t Get an Allotment?
When you apply for an IPO via the Application Supported by Blocked Amount (ASBA) route, the application money is blocked in your bank account rather than being immediately transferred to the issuer.
If you don’t get an allotment the blocked amount is released in accordance with the relevant process and timeframe. If you do get a partial allotment, the amount required for the shares allotted is debited, and the balance is released.
For UPI-based applications, the mandate allows for funds in the linked bank account to be blocked. The funds will remain blocked until the relevant process releases them or uses them to pay for the shares allocated.
If the funds are still blocked beyond the expected time frame, then check the status of the application and get in touch with your bank, broker or registrar with the details of the application in question. Do not divulge your UPI PIN, bank password or any other sensitive information to anyone who claims to be able to release the funds.
Listing Day: Can You Sell Straight Away?
Yes. If you get an IPO allotment and the shares are credited to your demat account, you can normally sell them on the day of listing (once trading has commenced), subject to the rules of the exchange and any restrictions on the securities in question.
The listing price is set by market demand and supply as part of the exchange listing process and can be above, at or below the IPO issue price. To receive an allotment doesn’t in any way guarantee you a listing gain.
Regulatory Guidelines (SEBI’s ICDR Rules)
The SEBI Issue of Capital and Disclosure Requirements (ICDR) Regulations lay down the rules relating to public issues, including the allocation of investor categories, reservations and allotment. The precise provisions that will apply will of course depend on the nature of the issue and the current regulations.
The main points investors should understand include:
- Reservations: The employee, shareholder and anchor-investor arrangements only apply where permitted and disclosed in the offer documents. Anchor allocation is part of the QIB allocation.
- Listing timeline: The standard public issue framework provides for listing on T+3 (three working days from the issue closing date), subject to the relevant regulatory framework and the disclosed issue timeline.
- Application funds: ASBA and UPI-based application processes dictate how funds are blocked, how they are utilised to buy the allotted shares and how they are released in the event of a non-allotment.
Real-World Example & Process Walkthrough
The Augmont Enterprises IPO (closed August 2026) is a good example of how subscription levels can vary across investor types. The published subscription data showed very strong demand in the QIB, NII and retail segments.
Recent IPO Subscription Example: Augmont Enterprises
| Category | Reported subscription |
| QIB | 238.46 times |
| NII | 127.63 times |
| Retail | 32.55 times |
| Overall | 111.14 times |
FAQs
IPO allotment is the process of distributing shares among eligible applicants after an IPO closes. The allocation follows the applicable rules and is finalised with the issuer, lead manager, registrar and designated stock exchange.
Yes. If the shares have been credited to your demat account and trading has commenced, you can, in most cases, sell them on listing day (subject to any applicable rules and restrictions). The listing price may be higher or lower than the IPO issue price, so there is no guarantee of a listing gain.
You might not get an allotment as the relevant category may have been oversubscribed, and there simply weren’t enough shares to go around. In the case of an oversubscribed retail category, a computerised lottery would be used to select applicants for the available minimum lot allotments. Applications may also be rejected for various reasons, including being invalid or not meeting the eligibility criteria.
If you don’t get the shares, then your blocked application amount will be released under the relevant ASBA or UPI process and timeline. If you get a partial allotment,t then the amount required for those shares will be debited, and the balance will be released. If your money remains blocked beyond the expected time, then get in touch with your bank, broker or registrar.
Not necessarily. For a mainboard IPO, retail applicants have to stay within the relevant ₹2 lakh cap. If the retail portion is oversubscribed and the minimum lot rules apply, then asking for more lots doesn’t in any way improve your chances of getting an allotment. Just check the rules of the issue and make sure your application is in fact eligible.
