Investors should apply for only one lot. A lot in an IPO (Initial Public Offering) refers to the minimum number of shares an investor can apply for in a single application. The company issuing the IPO determines the lot size, which may vary depending on the share price and company charter.
For example, if one lot is defined as 100 shares, an investor must apply for at least 100 shares to order one lot. This process helps standardise the application process and ensures that parts are allocated to manageable units. This is one of the key strategies to increase the chances of getting an IPO allotment.
Applying for just one lot is often quicker and more effective than trying to buy many lots. This is especially true when the IPO is oversubscribed, meaning more people want to buy shares than the number of shares available.
Practical steps you can follow while applying for an initial public offering.
Another way to increase your chances of getting an IPO allotment is to use multiple Demat accounts belonging to your friends and family. Legally, people can have more than one account, but it's important to follow the rules to avoid any problems.
When you apply through several Demat accounts, each one of them can receive an allotment. This improves your chances compared to applying through a single account. This increases the chance of getting an IPO allotment.
Ensure each account has a different name and PAN and follows the IPO rules. This will avoid technical rejections. You should also monitor all applications.
Also read: Tips to Invest in IPO
Pick the cut-off price to increase your chances of getting an IPO allotment. The cut-off price is the final price at which shares are allotted. Opting for it shows your willingness to pay the highest price in the given price band. This puts you in a good position in the allotment process.
This option is especially good in very oversubscribed IPOs, where the final price is likely to be at the high end of the price band.
Sometimes, the servers get overloaded as many people try to apply for an IPO. So, you must avoid applying for an IPO at the last minute. Doing so can increase your IPO allotment chances.
Applying well before the deadline ensures it is processed smoothly, without any last-minute hassles or technical rejections. Server issues or unnoticed mistakes can cause technical rejections.
You can use several strategies to apply on time. You can set reminders to track IPO dates and deadlines, prepare and organise all required documents, and ensure they have the necessary funds ready in advance. Submitting an early application on the first or second day of the IPO opening period is also recommended.
Technical rejections can be caused by errors, such as incorrect details, multiple applications from the same PAN, and insufficient funds in the linked bank account.
Attending to small details can help you prevent technical errors, greatly improving your chances of a successful application. Ensuring that your application is error-free is essential to avoiding rejections.
Some best practices avoid technical rejections. They include verifying personal details, bank info, and Demat account numbers. You must check that the linked bank account has enough money. It needs to cover the application amount. Then, you can apply for an IPO easily. Lastly, you must follow the rule of one application per PAN. This is to avoid automatic rejections.
Also Watch: Pre Apply IPO Feature on the Sharekhan App
You can invest in the parent company's shares if they are listed. This process can also sometimes provide an edge. It helps in getting an allotment in its subsidiaries' IPOs. However, this is not a guaranteed method, but it will certainly improve your chances.
Companies sometimes favour existing shareholders during the allotment process to reward their loyalty and support. Many companies also set a shareholder’s quota in an IPO, allowing shareholders of the parent company to apply and increase their chances of getting an IPO allotment.
The serious truth about increasing IPO allotment chances lies in strategic application practices. One can use the above-mentioned tactics to apply for an IPO. However, despite all these steps, you may still not be able to get the IPO allotment; this is just to increase your chances to get an IPO allotment.
Increasing the chances of IPO allotment requires a strategic approach and meticulous planning. Use one lot application and multiple Demat accounts. Also, choose the cut-off price. These steps can greatly increase your allotment chances. Also, one should avoid last-minute rushes and rejections and invest in the parent company's shares. Each method addresses different parts of the IPO application process. Together, they improve your chances of getting those coveted shares. Following these guidelines will help increase your chances of IPO allotment.
Knowing how to increase IPO allotment chances requires smart application strategies. It also requires timely submissions and careful attention to detail. By using these practices, you can position yourself well in the race to get IPO shares. You may also reap the rewards of your investments.
For more insights and guidance on how to increase the chances of IPO allotment and other investment strategies, visit the Sharekhan Knowledge Centre. Here, you'll find a wealth of resources to help you make informed decisions and achieve your financial goals.
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