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When Will Investor Get to Know Of The Allotment Status

Investing in stocks is both exciting and rewarding for individuals. Therefore, investors eagerly await the allotment status of Initial Public Offerings (IPOs) or private securities offerings. The allotment status decides whether the investors have been allotted shares among other information. 

Investors usually learn about the allotment status of their investment a few days after the subscription period ends. As a result, investors must keep track of notifications and orders from the issuing company. 

What is IPO Allotment?

IPO allotment is when a company goes public by selling its shares to investors on a stock exchange. Several companies nowadays opt to sell their shares through Initial Public Offerings (IPOs) since it allows them to raise money quickly and affordably. 

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The IPO allotment status helps investors discover the number of stocks that have been issued to them. After the specified period of allotment, the organization sells the remaining unsold shares to other investors on the stock exchange.

How Does the Allotment Process of Shares Work?

The process of allocating shares involves distributing shares to investors who applied for them during an IPO. The allotment process is often divided into phases, which are outlined below.

Subscription Period:

The company announces the subscription period for a specific duration of time during which investors can apply.

Submitting Application:

Investors who want to participate in public offerings submit their applications specifying the number of shares they want to buy and providing necessary information like their personal details, payment method, etc.

Review and Evaluation:

Following the subscription period, the company and its underwriters analyze the applications submitted. They consider criteria such as the number of shares applied for, the level of oversubscription, regulatory requirements, and the company's allocation policy.

Allotment Decision:

The company and its underwriters make an allocation decision based on the assessment of how many shares will be given to whom. The goal is to distribute the shares fairly and adhere to the regulatory requirements.

Notification:

After the allotment decision is finalized, the organization tells investors about their allotment status. Investors are informed of the number of shares allocated, whether total, partial, or no shares have been allotted.

Money Refunds:

When investors have not been provided with shares or allotted only a portion of the claims, the company refunds the unutilised funds to the investors' bank accounts.

Timeline for Allotment: 

Investors are usually notified of their allotment on the same day, i.e., the day of the Offer for Sale (OFS). However, the allotment status update can turn up within a few days after the subscription ends or may take several weeks. Businesses constantly disclose the allotment status as soon as possible to ensure transparency and investor confidence.

What are the Factors Influencing Allotment Status?

Several variables influence the timeline for investors to learn about their allotment status, such as:

  1. Duration of Subscription Period: An extended subscription period provides more time for processing applications and allotments to be finalized. 
  2. Oversubscription Levels: If the IPO receives many applications, the allotment procedure may take longer due to the necessity of proper scrutiny and equitable allocation. 
  3. SEBI Regulatory Framework: The regulatory framework and guidelines of the relevant share market also impact the timing. This is because compliance processes must be undertaken before allotments are announced.

How Will Investors Learn About The Allotment of Shares?

Investors can learn about their allotment of shares through several communication channels given by the company issuing the IPO. Here are some common approaches:

Online Portals:

Many businesses provide online portals that allow investors to check their allotment status. Investors can use their login credentials to access these portals and view the number of shares assigned to them.

Email:

Investors may get email updates about their allotment status from the company or its registrar. These emails often include information such as the number of shares allotted or the exchange of extra cash.

Letters:

In some circumstances, investors may receive physical letters in their physical mailboxes. These letters contain specifications regarding the allocation status, such as the number of shares allotted or refund information.

As a result, during the allocation period, investors should monitor their registered email accounts and mailboxes frequently. Companies strive to guarantee effective and timely communication to offer investors accurate data. 

The Takeaway

To sum up, companies seek transparency with effective and timely communication to their eager investors about the IPO allotment status. As a result, investors can make informed judgments about whether to hold or sell their allocated shares after they know their allotment status.

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