How to Check IPO Allotment Status?
IPO full form is Initial Public Offerings. And in this blog, we will learn more about how to check IPO allotment status, IPO GMP, IPO grey market, and IPO grey market premium, rather than just IPO full form.
Since IPO's full form is established, let’s understand what an IPO is.
An Initial Public Offerings or a stock launch is a public offering, which allows a company to sell its shares to an institutional investor, and to a retail investor, usually. Typically, an IPO is an underwritten decision by 1 or more investment banks, which are also engaged in the listing of shares on the stock exchanges.
As we have established IPO full form, what an IPO is, before moving forward, let’s have a look at a term that will come handy in further, which is - IPO GMP.
IPO GMP, we already know the IPO full form, so let’s have a look at GMP full form, Grey Market Premium, which is a premium amount at which IPOs are traded prior to being listed on the stock exchanges.
This is better understood through an example, say, LIC has fixed its market price to be Rs 90 per share, while its IPO GMP price is 50, in this case, the organization will be listed at Rs 140.90.
IPO GMP, plays a crucial role in IPO, considering that determines the interest degree in an IPO among investors. Yet, it does not guarantee that GMP will accurately predict the price of the listing. Although, it is a tool used to verify the listing price before investment.
In case you are wondering how to calculate the IPO GMP, then it is understandable -
Say, if the demand for shares is too high, however, supply is limited, the premium quote (IPO grey market premium) of the shares will be over the allotment price. Thus, a buyer has to offer an additional amount above the price of the IPO to get the shares prior to the listing.
Since the understanding of IPO GMP, what an IPO is, and IPO full form is established, now, let’s move on to the process of IPO allotment of IPO shares allotment, in the next section.
How Shares Are Allotted in IPO? | Procedure of IPO Allotment
Before understanding how shares are being allotted in an IPO it is essential to understand what is “lot size.”
So, let’s start from what is the lot size, when a company announces an IPO, the total equity shares offered by it are divided into lots, each divided lot consists of an equal number of shares and each application is made by a retail investor will be multiplied by the number of lots.
It can be understood through an example, say an ABC company has issued Rs 1 lakh shares in an IPO, and its lot size is 10 shares per lot. In such a case, the total number of shares on offer = (total number of shares/ total number of shares in a lot), which will be equal to 10,000.
So, whenever a retail investor bids a share in an IPO, the number of shares bid could be 1 lot, 2 lot, and more. However, they can not bid in terms of the number of shares. Therefore, once every bid is submitted, a system process will be run to eradicate improper submission of bids by the investors.
Hope you have understood the process of IPO allotment, let’s move on to How to Check IPO Allotment Status or IPO Allotment Status.
How to Check IPO Allotment Status | IPO Allotment Status
- Visit the official website of BSE India to know how to check IPO allotment status.
- Under the “issue type,” click on “equity.”
- Under “issue name,” select, “name of IPO.”
- Provide your application number.
- Add your PAN and ID.
- And complete the submission.
Now, let’s move to - How to check IPO allotment status in Zerodha.
How to Check IPO Allotment Status in Zerodha | IPO Allotment Status in Zerodha
- Visit the official website of Zerodha.
- Registrar of the IPO (i.e. Karvy, Link Intime) is responsible for IPO share allotment. They publish the allotment status on their website once the share allotment process is complete.
- If an IPO allotment status is not present on the Zerodha website, you will get an alert from CDSL when IPO allocated shares are credited to your Demat account.
What is IPO Grey Market | IPO Grey Market Premium
IPO grey market, also known as parallel market, is a market under which trading of goods is done, under the realm of manufacturers' official trading channels. One can understand the IPO grey market, through the below-mentioned example -
Say, a small business is selling goods of a specific company, though they are not authorized dealers of the same. However, the small business conducted by an individual is legal and authorized.
So, an IPO grey market is a market where shares of a company are bids and offered by traders unofficially. This process begins prior to the issuance of shares by a company for IPO. Moreover, as it is an unofficial market, no rules and regulations are applicable the same, thus market regulators such as the Securities and Exchange Board of India (SEBI) are not involved in these kinds of transactions.
Typically, these are operated by a small set of individuals on the basis of mutual trust.
Since, we have learned a gist about what an IPO grey market premium is, let’s have a look at it in detail -
As mentioned above, IPO grey market premium is the price at which shares are being traded in the same market, that is IPO grey market.
Let’s understand it through an example,
The issue price of company A is Rs 200, while IPO grey market premium is Rs 400. Thus if people agree to buy the shares at the price of Rs 600 from company A.
That’s the typical way, in which IPO grey market or IPO grey market premium works.
Though our blog on How to Check IPO Allotment Status is not offering any legal advice to anyone, thus, we won’t be liable for any consequence or damage, or loss that could occur.
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