A mainboard issue closed in August 2026 with its retail portion subscribed just over 60 times. The 60× subscription figure made the allotment odds extremely low, but that figure does not by itself mean that exactly one in 60 applications received shares. The other 59 had their money unblocked two days later and read a lot of speculation about why.
Almost none of that speculation was right. Allotment in an oversubscribed Indian IPO is a defined process with published rules, and the honest answer to “why did I not get it” is usually one of four things. Three of them are arithmetic. One of them is your own application, and that is the only one you can do anything about.
Where the shares go before you bid
An IPO is not one pool. The shares are divided between categories before a single application is received, and you are only ever competing against people in your own category.
In a standard book-built mainboard issue, qualified institutional buyers get up to 50 per cent, retail individual investors get not less than 35 per cent, and non-institutional investors get not less than 15 per cent. Retail means an application up to ₹2 lakh. Cross that line by a rupee and you are a non-institutional investor competing in a different pool under different rules.
There is a second structure worth knowing about. Where a company does not meet the profitability and asset tests in the ICDR regulations, it can still list, but the issue must be made with at least 75 per cent to institutions. Retail is capped at 10 per cent in that structure rather than 35.
That single fact explains a lot of disappointment. Two IPOs can attract identical retail demand and produce very different odds, because one of them set aside a third of the issue for retail and the other set aside a tenth. It is disclosed in the prospectus, and almost nobody reads it before applying.
How the retail draw actually works
The registrar to the issue decides the basis of allotment in consultation with the designated stock exchange. The governing principle is that SEBI wants the retail shares spread across as many people as possible rather than concentrated in the largest applications.
So the registrar starts by asking a single question: can every valid retail applicant be given the minimum bid lot?
If yes, everyone gets one lot, and whatever shares remain are distributed proportionately among those who asked for more. This is the case at mild oversubscription, and in that situation the size of your application does matter.
If no, because there are more valid applicants than there are lots to hand out, the registrar runs a computerised draw. Winners get exactly one lot. Everyone else gets nothing. In a heavily oversubscribed retail issue where there are more valid applicants than available minimum lots, applying for more lots does not improve your chance of receiving the minimum lot.
This is the part that gets flattened in most explanations. “Applying for more lots never helps” is not quite true. It is true in every heavily oversubscribed issue, which is most of the ones people care about, and it is false in the mildly subscribed ones nobody talks about.
The reasons that are not luck
A meaningful share of unsuccessful applications never entered the draw at all. These are rejected before allotment, and the applicant usually never finds out which category they fell into.
The common ones. A mismatch between the PAN, the demat account and the bank account, or a wrong DP ID or client ID. A UPI mandate that was not approved before the cut-off, which means the funds were never blocked and the bid was never valid. A bid placed below the final issue price, which is why retail investors are given the cut-off price option and should generally use it. And an application submitted so close to the deadline that the intermediary did not upload it in time.
Then there is the one that catches families every year. One PAN, one application. Two applications under the same PAN, even through two different brokers or two different banks, results in both being rejected as multiple bids. The system does not pick the better one. It discards both.
Separate applications from separate PANs are a different matter and are entirely valid. A household with three adults holding three demat accounts has three entries in the draw rather than one. What is not valid is applying in someone else’s name or funding their application: The applicant’s identity and account details must satisfy the applicable requirements, and the funds used for the application must come through an account and payment mechanism permitted under the IPO rules.
What actually changes your odds
Very little, which is the point.
Applying at the cut-off price removes the risk of bidding below the final price. Applying a day early rather than in the last hour removes the mandate and upload risks. Checking that your PAN, demat and bank details match removes the rejection risk. Beyond that, the number of lots is irrelevant in a heavily subscribed issue, the broker you apply through does not give you a better allotment probability, provided your application is valid and reaches the issue system in time, the day within the window is irrelevant to the draw itself, and there is no priority for existing customers of anyone.
The genuinely large lever is the one people ignore: choosing which IPOs to apply to. An issue where retail is capped at 10 per cent and demand is heavy will produce far worse odds than one where retail has 35 per cent and demand is moderate. Both numbers are public before you bid.
The non-institutional category
Investors sometimes conclude that crossing ₹2 lakh improves matters. It changes the rules rather than improving them.
The non-institutional quota is split. One-third goes to applications between ₹2 lakh and ₹10 lakh, and two-thirds to applications above ₹10 lakh, with the two sub-categories allotted separately. Since April 2022, allotment here is no longer purely proportionate: an oversubscribed sub-category is settled by a minimum-size allotment to successful bidders, subject to availability, followed by proportionate allotment of remaining shares.
Non-institutional bidders also cannot use the cut-off price and cannot withdraw a bid once it is placed. Retail investors can do both. For most people the retail category is the better place to be, and moving out of it to chase allotment means committing at least ₹2 lakh to a lottery with a smaller pool.
The timeline, so you know when to stop refreshing
Since 1 December 2023, listing runs on a T+3 timetable, where T is the working day the issue closes.
The registrar finalises the basis of allotment on T+1. On T+2 the shares are credited to the demat accounts of successful applicants and the blocked funds are released for everyone else. The stock lists and begins trading on T+3.
You will usually know before any portal updates. If the application amount is finally debited, that generally indicates an allotment; if the block is released without a debit, the application was unsuccessful. Status is also published on the registrar’s website, which is named in the prospectus, and on the BSE and NSE allotment pages, all searchable by PAN.
Common questions
Does applying for more lots improve my chances?
Not in a heavily oversubscribed issue, where every winner receives exactly one lot. In a mildly oversubscribed one, where everyone can be given a lot and shares remain, the balance is distributed proportionately and application size does matter.
Can I apply from two demat accounts to double my chances?
Only if they are under different PANs belonging to different people. Two applications under one PAN are both rejected.
Does the broker I apply through affect allotment?
No. The registrar runs the draw on all valid applications regardless of where they came from.
Why was my application rejected rather than unsuccessful?
Usually a details mismatch, a UPI mandate not approved in time, a bid below the final issue price, or a duplicate under the same PAN. Rejected applications never enter the draw.
When do I get my money back?
It was never taken. The amount is blocked, not debited, and the block is released on T+2 if you are unsuccessful.
Is the lottery genuinely random?
It is a computerised draw run by the registrar with the designated stock exchange, and the basis of allotment is published. For valid applications competing for the minimum lot within the relevant category, the selection is made through that prescribed draw rather than by the broker choosing which applicants receive shares.
Are the odds different in SME IPOs?
The structure differs, including a higher minimum application and no cut-off price option. The allotment method for the non-institutional sub-categories was aligned with mainboard for SME offer documents filed after 8 March 2025.
Should I just buy on listing day instead?
That is a different decision with a different price and different risk. Not getting an allotment is not a reason to buy at whatever the stock opens at.
The part worth remembering
Allotment feels personal and is not. In an oversubscribed issue you are one line in a spreadsheet held against a fixed number of shares, and the arithmetic was settled before you applied.
What you control is narrow but real. Bid at cut-off, apply with time to spare, check that your details match, apply once per PAN, and look at the retail reservation in the prospectus before deciding the odds are worth your money for six days. Everything past that is a draw, and treating it as anything else is how people end up applying to issues they never looked at.
Risk disclosure
Hem Finlease Private Limited, SEBI Registration No. INZ000167734. Hem Securities Limited, SEBI Reg. No. IN-DP-568-2021, CDSL: 17700/17701.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI and membership of recognised stock exchanges do not guarantee the performance of the intermediary or provide any assurance of returns to investors.
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