Ever wondered how IPO allotment is decided when millions of people apply for a limited number of shares? SEBI has a clear, regulated process for this. Understanding it helps you maximise your allotment probability.
How the Lottery Works
In the Retail Individual Investor (RII) category, when applications exceed available shares, SEBI uses a computerised draw of lots. The key rule: each applicant gets either exactly 1 lot or nothing. The number of lots you apply for does NOT affect your probability of getting 1 lot.
Step-by-Step Allotment Process
- IPO closes and subscription data is finalised
- Registrar consolidates all valid applications by PAN
- For RII: Maximum allotment size is 1 lot per applicant
- Available retail quota is divided by lot size to get "allottable lots"
- If applications > allottable lots, lottery is conducted by computer
- Winners get exactly 1 lot — losers get refund
- Results published on T+6 day
How to Maximise Your Allotment Chances
- Apply from multiple family member accounts (each PAN = 1 application)
- Apply at cut-off price to ensure eligibility at any final price
- Submit applications early — last-day technical glitches can invalidate applications
- Ensure UPI mandate is approved before 5 PM on closing day
- Verify all details (PAN, Demat ID, bank account) are correct
NII Category: Proportional Allotment
Unlike RII, the NII (HNI) category uses proportional allotment. If the category is 100x oversubscribed, you receive 1/100th of the shares you applied for. This means applying for more lots directly increases your allotment amount — but the minimum allotment is still 1 lot.
Smart Strategy: For high-demand IPOs, maximise retail applications from all family members. For NII category, calculate the minimum application needed to get at least 1 lot based on expected subscription levels.