InvestorQ : As an IPO investor, what is it that I need to understand about IPO allotment, I understand that allotment rules were modified in 2012?
Abhisha Yadav made post

As an IPO investor, what is it that I need to understand about IPO allotment, I understand that allotment rules were modified in 2012?

Answer
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Riya Dwivedi answered.
1 year ago


What retail investors need to understand is that post-2012 SEBI has made IPOs more-friendly towards small investors. Today there are broadly 3 categories of investors who have separate quotas in any IPO. There are the Qualified Institutional Buyers (QIBs), the non-institutional investors (HNIs) and the Retail Investors. The retail investors can invest up to Rs.2 lakh in any IPO, while any investor who wants to apply above the limit of Rs.2 lakh will be classified as a non-institutional investor (HNI). The allotment of shares becomes very simple when the issue gets barely subscribed or undersubscribed in the retail portion. In that case, all eligible bids will get firm allotment. But the issue of allocation arises when the issue gets oversubscribed. Then there is a question of allotment that arises and that is what retail investors need to understand in greater detail so that they can be better prepared to invest in IPOs during this year.