Question 1

How does IPO subscription work?

Accepted Answer

IPO subscription is calculated from all the applications investors submit. It essentially shows how much demand there is for a particular IPO. To figure it out, you divide the total number of shares investors applied for by the total number of shares the company offered.

Based on the applications received, an IPO can be either:
• **Oversubscribed:** This happens when investors apply for more shares than the company is offering.

• **Undersubscribed:** This means investors applied for fewer shares than the company offered.

Stock exchanges continuously update the subscription status on their websites in real-time as they receive bids.

Question 2

When can I see live IPO subscription data?

Accepted Answer

You can view live IPO subscription data online while the IPO is open for applications, typically between 10 AM and 5 PM. This data comes directly from the stock exchanges. The subscription numbers change constantly as new bids come in and are only finalized once the IPO closes.

Question 3

How can I check the live IPO subscription status?

Accepted Answer

You can access live IPO subscription data online. This data is updated between 10:00 a.m. and 5:00 p.m. each day the IPO is open for applications.

Here are the steps to check the live IPO subscription status:
1. Visit the website `iposcanner.ai`.
2. On the homepage, click on the specific IPO you're interested in.
3. Navigate to the 'Subscription' tab.
4. You'll then see the live subscription data.

Question 4

What happens once an IPO subscription period ends?

Accepted Answer

Once the IPO bidding period closes at 5 p.m. on the final day, the stock exchanges send all the bid data to the registrar for further processing. The registrar then carries out these important steps:
• They review all applications to accept valid bids and reject any that are invalid or incorrect.

• They finalize the basis of allotment, deciding how shares will be distributed, in consultation with the exchanges.

• They process refunds for application money if an investor receives a partial allotment or no allotment at all.

• They credit the allotted shares directly into the Demat accounts of the successful applicants.

After these steps, the shares are officially listed on the stock exchange, and regular trading begins.

Question 5

How is IPO subscription calculated?

Accepted Answer

Stock exchanges like BSE and NSE calculate IPO subscription numbers in real-time based on the bids they receive during the IPO bidding session.

These subscription figures are broken down by investor category (e.g., Qualified Institutional Buyers, Non-Institutional Investors, Retail Individual Investors) to show the demand from each group.

The calculation is simple: you divide the total number of shares applied for by the total number of shares offered.

Let's look at an example:
A company offers 70,000 shares in total.
• 35,000 shares are for Qualified Institutional Buyers (QIBs).

• 10,000 shares are for Non-Institutional Investors (NIIs).

• 25,000 shares are for Retail Individual Investors (RIIs).

Now, let's say the applications received are:

• 70,000 shares from QIB investors.

• 9,000 shares from NIIs.

• 30,000 shares from RIIs.

Based on these numbers, the subscription status would be:

• **QIB subscription:** 2x (70,000 / 35,000)

• **NII subscription:** 0.9x (9,000 / 10,000)

• **RII subscription:** 1.20x (30,000 / 25,000)

Overall, this IPO would be considered 1.55x times oversubscribed.

Question 6

How can I increase my chances of getting an allotment in an oversubscribed IPO?

Accepted Answer

There's no guaranteed way to get an allotment in an oversubscribed IPO, as demand outweighs supply. However, you can follow some best practices to improve your chances:
• Always check the IPO subscription status before you apply.

• Double-check your application for any input errors to avoid rejection.

• Consider applying through different Demat accounts of eligible family members.

• If you're using UPI for your application, remember to approve the UPI mandate promptly.

• If you qualify, utilize any available employee or shareholder quotas.

• If multiple IPOs are open, strategically allocate your funds based on their subscription status and Grey Market Premium (GMP).

Question 7

How do I apply for an oversubscribed IPO?

Accepted Answer

The process for applying to an oversubscribed IPO is the same as for any other IPO. You can apply online using UPI (Unified Payments Interface) or ASBA (Application Supported by Blocked Amount) through your bank or stockbroker. The subscription status doesn't change the application method itself. For a detailed guide, you can refer to the specific IPO Application Procedure via UPI or ASBA.

Question 8

What exactly is an oversubscribed IPO?

Accepted Answer

An oversubscribed IPO simply means that investors have applied for more shares than the company initially offered. In other words, the demand for the shares is higher than the available supply.

For example, if a company offers 1 million shares in an IPO but receives applications for 3 million shares, the IPO is considered three times oversubscribed.

It's quite common for IPOs to be oversubscribed, sometimes even hundreds of times over!

Several factors can contribute to an IPO being oversubscribed:
• **Issue Size:** Smaller IPOs often get oversubscribed more easily.

• **Market Conditions:** A strong bull market can increase investor appetite.

• **Company Demand:** High investor interest in the specific company.

• **Pricing:** A reasonably priced IPO is more attractive.

• **Promoter Reputation:** Companies with trusted promoters (like Tata or L&T) often see higher demand.

Question 9

What does "undersubscription" mean for an IPO?

Accepted Answer

Undersubscription occurs when the number of applications received from investors is less than the total number of shares offered in an IPO. This indicates that the demand for the shares is lower than the supply.

For instance, if a company offers 1 million shares but only receives applications for 500,000 shares, the IPO is undersubscribed.

If an IPO isn't fully subscribed, the company has a few options:
• **Extend the deadline:** They can extend the IPO closing date, sometimes for up to 10 days.

• **Reduce OFS size:** If it's a partial or full Offer for Sale (OFS), the company might reduce the size of the OFS to successfully close the issue.

• **Withdraw the IPO:** In some cases, the company might decide to withdraw the IPO entirely.

Question 10

What's the difference between oversubscription and undersubscription in an IPO?

Accepted Answer

Both undersubscription and oversubscription tell you how many times an IPO has been subscribed. They are key indicators of investor interest. Here's a breakdown of their main differences:

| Feature | Oversubscription | Undersubscription |
| :----------------- | :---------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------ |
| **Meaning** | The total number of applications (bids) received is more than the shares offered. | The total number of applications (bids) received is less than the shares offered. |
| **Demand** | Demand for shares is greater than the supply. | Demand for shares is less than the supply. |
| **Allotment** | Allotment is not guaranteed due to high demand. | Investors typically receive a guaranteed allotment. |
| **Min. Subscription** | Minimum subscription levels are usually met. | If the 90% minimum subscription isn't met, the company must refund all application money to investors. |
| **Company Outlook** | Often indicates strong prospects and high investor confidence. | May suggest average performance or weaker prospects due to lower investor interest. |

Question 11

Can an IPO subscription be canceled?

Accepted Answer

**For Investors:**
• If you're a retail investor, you can cancel your IPO application at any time before the official closing date of the offering.

• However, applications in the Non-Institutional Investor (NII) and Qualified Institutional Buyer (QIB) categories generally cannot be withdrawn. While withdrawal isn't possible, you might be able to modify (upsize) your bid price as long as the IPO is still open.

**For Companies:**
If an IPO doesn't receive full subscription or fails to meet the minimum subscription requirements, the company has options. They might extend the deadline for the offering or reduce the size of the Offer for Sale (OFS). If these measures aren't successful, or if the company decides to cancel the IPO for other reasons, they can do so at any point.

Question 12

Can I apply for an IPO after market hours?

Accepted Answer

Yes, you can typically place a bid for IPO shares even after market hours, but there's a catch. This is usually allowed by your broker or bank, except on the very last day of the IPO. Any orders placed after market close will be sent to the stock exchange on the next business day.

It's important to remember that the stock exchange's IPO bidding platform is only open from 10 AM to 5 PM. So, even if your broker or bank accepts your application outside these hours, it won't actually be submitted to the exchange until 10 AM the following day.

Question 13

How do I check the IPO subscription status on NSE?

Accepted Answer

The National Stock Exchange (NSE) website shows live subscription data under the 'IPO' tab within 'Market Watch'. Keep in mind that for mainboard IPOs, bids are submitted on both the BSE and NSE platforms. The NSE website will only display the bids received specifically on its platform in real-time.

For a consolidated view of live IPO subscription status, you can also check `iposcanner.ai`.

Here are the steps to check the IPO subscription status on the NSE website:
1. Visit the NSE website.
2. Click on the 'Market Data' tab, then select 'New Public Issues'.
3. Find and open the specific IPO for which you want to check the subscription status.
4. Choose 'NSE Bid details' or 'Consolidated Bid details' as your category.
5. Click on 'Bid details'.
6. You will then see the total number of bids received from different investor categories.

Question 14

What are the typical IPO subscription timings?

Accepted Answer

The IPO subscription period generally starts at 10:00 a.m. on the opening day of the IPO and concludes at 5:00 p.m. on the final day. Investors can submit their applications at any point within this window.

If you submit a bid after 5:00 p.m. (except on the last day), it will be processed and uploaded to the exchange on the next business day. However, be aware that some brokers and banks might only allow bids to be submitted between 10:00 a.m. and 5:00 p.m.

It's also important to note that the cut-off time for IPO applications on the last day can vary between different banks and brokers. Always confirm their specific closing times.

Question 15

What happens if an IPO isn't fully subscribed?

Accepted Answer

If an IPO is more than 90% subscribed but still not fully subscribed, all investors who applied will typically receive their full allocation of shares.

However, if the IPO fails to reach the minimum subscription level of 90% of the total issue size, the following can happen:
• The company (issuer) might extend the deadline for closing the IPO and potentially reduce the issue price to attract more investors.

• The issuer might reduce the Offer for Sale (OFS) portion of the issue.

• If these measures are unsuccessful, the issuer is legally required to refund the entire application amount to all investors, and the IPO will be canceled.

Question 16

Can you explain "undersubscription of shares" again?

Accepted Answer

Undersubscription of shares happens when an IPO receives fewer applications from investors than the total number of shares it offered.

For example, if a company offers 50,000 shares but only gets applications for 40,000 shares, it's considered undersubscribed.

In such a scenario, all investors who applied will receive their full allotment of shares. However, if the IPO doesn't meet the minimum subscription rate of 90% of the total issue size, the IPO will be canceled, and the company must refund all the money to the investors.

Question 17

How do I know how much an IPO is subscribed?

Accepted Answer

You can check the IPO subscription status on platforms like `iposcanner.ai`.

The "IPO subscription" indicates the demand for a public issue by showing how many times the shares offered have been applied for on exchanges like BSE and NSE.
• If the IPO subscription is **more than 1**, the issue is considered **oversubscribed**.

• If the IPO subscription is **less than 1**, the issue is considered **undersubscribed**.

• If the IPO subscription is **exactly 1**, the issue is considered **fully subscribed**.

Question 18

What happens if an IPO is fully subscribed?

Accepted Answer

When an IPO is fully subscribed, it means all the shares offered have been applied for by investors. This is a positive sign, indicating strong interest in the company's shares.

However, even if it's "fully subscribed," it doesn't necessarily mean every investor will receive an allotment. In both fully subscribed and oversubscribed IPOs, the allotment process is typically done on a proportionate basis or through a lottery system, depending on the degree of oversubscription and the specific investor category.

Question 19

What does "overall subscription status" mean in an IPO?

Accepted Answer

The "overall subscription status" in an IPO refers to the total number of bids received from *all* investors compared to the total number of shares offered by the company.

This overall status will indicate whether the IPO is either oversubscribed or undersubscribed.
• If the total number of bids is greater than the shares offered, the IPO is oversubscribed.

• If the total number of bids is less than the shares offered, the IPO is undersubscribed.

This status is dynamic and changes throughout the IPO bidding period, becoming final only after the offering closes.

Question 20

What is the minimum subscription requirement for an IPO?

Accepted Answer

The minimum subscription for an IPO is the smallest percentage of shares that a company must successfully sell from its total issue size by the time the IPO closes.

According to SEBI regulations, every company conducting an IPO must receive applications for at least 90% of its total issue size. If the company (issuer) fails to meet this 90% minimum subscription threshold, it is legally obligated to refund the entire application amount to all investors, and the IPO will be canceled.

Question 21

Is an oversubscribed IPO a good sign?

Accepted Answer

Generally, yes, an oversubscribed IPO is considered a good sign. It indicates strong investor confidence and high demand for the company's shares.

When an IPO is oversubscribed, it means that more investors want to buy the shares than are available. This usually suggests that investors believe the company has promising future prospects.

However, it's important to remember that in an oversubscribed IPO, allotment of shares to all applicants is not guaranteed due to the high demand. For more insights, you might want to check out reports on IPO Subscription vs. Listing Gain.

Question 22

Could you define an oversubscribed IPO again?

Accepted Answer

An oversubscribed IPO is simply an Initial Public Offering where the company receives more applications (bids) for shares than the total number of shares it offered to the public.

This situation signals high demand for the company's stock, which is a positive indicator for the company. It means many investors are eager to purchase its shares. However, because demand exceeds supply, allotment of shares is not guaranteed for all applicants in an oversubscribed IPO.

Question 23

What happens during the allotment process if an IPO is oversubscribed?

Accepted Answer

When an IPO is oversubscribed, the allotment of shares typically occurs either on a proportionate basis or through a lottery system. The method used depends on the degree of oversubscription and the specific investor category.
• If the number of eligible investors is greater than the maximum number of allottees allowed, shares are usually allocated via a lottery system.

• Otherwise, if the number of investors is less than or equal to the maximum allottees, shares are distributed on a proportionate basis.

You can find more detailed information about the allotment process in dedicated resources like an "IPO Allotment Chapter."

Question 24

How can I tell if an IPO is oversubscribed?

Accepted Answer

To determine if an IPO is oversubscribed, investors should check its subscription status.

An IPO is considered oversubscribed when the total number of bids (applications) received is greater than the total number of shares offered by the company. In simpler terms, if the IPO subscription ratio is more than 1, it's oversubscribed.

For example, if a company offers 10,000 shares but receives bids for 20,000 shares, the issue is 2x (20,000 / 10,000) oversubscribed. This subscription ratio is calculated for individual investor categories (like retail, NII, QIB) and also as an aggregate (overall) figure.

Question 25

Is it possible to get multiple lots in an oversubscribed IPO?

Accepted Answer

When an IPO is oversubscribed, getting multiple lots is not guaranteed; in fact, sometimes even securing a single lot can be challenging.
• If the total number of eligible investors is less than the maximum number of allottees, then a single lot is assured for each applicant, and any remaining shares are allocated proportionally.

• However, if the number of investors exceeds the maximum number of allottees, the allotment is typically done through a lottery system, meaning even one lot is not guaranteed.

Question 26

How many lots should I apply for in an oversubscribed IPO?

Accepted Answer

In an oversubscribed IPO, it's generally advisable to apply for just one lot, or perhaps slightly more if you're comfortable.

Applying for a very large number of lots, hoping to secure more shares, often isn't effective because it simply blocks a larger amount of your funds without significantly increasing your chances of allotment.

Instead, a common strategy to improve your chances of getting an allotment is to place bids for smaller lots through different Demat accounts belonging to eligible family members or friends.

Question 27

What happens if an IPO is undersubscribed?

Accepted Answer

If an IPO is undersubscribed, two main scenarios can occur:
• **Below 90% Minimum Subscription:** If the company fails to receive applications for at least 90% of its total issue size by the closing date, it is legally required to refund the entire application amount to all investors. In this case, the IPO is canceled.

• **Above 90% but Not Fully Subscribed:** If the subscription is more than 90% but still not fully subscribed (meaning demand is less than 100% of shares offered), all investors who applied will typically receive their full allotment of shares.

Question 28

Where can I check the IPO subscription status?

Accepted Answer

You can check the IPO subscription status on various platforms. One common source is `iposcanner.ai`.

To check live subscription data on `iposcanner.ai` during the offering period, follow these steps:
1. Go to the `iposcanner.ai` homepage.
2. Select the specific IPO you're interested in.
3. Click on the 'Subscription' tab.
4. Scroll down to view the subscription numbers and detailed information.

Investors can place bids for IPO shares through either the BSE (Bombay Stock Exchange) or NSE (National Stock Exchange). Both exchanges also provide live IPO subscription status directly on their respective websites for the bids they receive.

**Steps to check IPO subscription status on BSE:**
1. Visit the BSE website for live public issues.
2. Click on 'Live IPO'.
3. Look for 'BSE Demand Schedule' or similar.

**Steps to check IPO subscription status on NSE:**
1. Visit the NSE IPO page website.
2. Click on the relevant IPO.
3. Look for 'Bid Details' or similar.

Category	Shares Offered	Amount (Rs Cr)	Size (%)	Shares Bid for	Subscription (times)
QIB	5,380,106	192.07	28.57%	22,240,512	4.13x
NII	4,035,080	144.05	21.43%	6,088,446	1.51x
Big NII	2,690,053	96.03	14.29%	4,539,066	1.69x
Small NII	1,345,027	48.02	7.14%	1,549,380	1.15x
Retail	9,415,186	336.12	50.00%	15,507,996	1.65x
Total	18,830,372	672.24	100%	43,836,954	2.33x

Understanding IPO Subscription

Understanding IPO Subscription

How Does Subscription Data Benefit Investors?

Timing Your IPO Subscription

Charges for IPO Subscription

Bidding Categories in IPOs

Using an IPO Subscription Calculator

Sula Vineyards IPO Subscription Example

Key Takeaways:

Different Types of IPO Subscriptions

1. Oversubscribed IPO

2. Undersubscribed IPO

Subscription Impact on Listing Price

Subscription and Grey Market Premium

Historical Subscription Data

Frequently Asked Questions