The SME IPO Handbook · Chapter 8 of 12
Subscription and Allotment in SME Issues
Subscription patterns
SME issues are often subscribed many times over because the offer is small. Look beyond the headline: check retail versus HNI demand and the pattern across days.
Allotment
Retail allotment is by lottery when oversubscribed, with each winner getting a minimum lot. HNI categories are allotted proportionately. Because lots are large, many applicants end up with a single lot of shares.
Registrar and dates
Allotment status appears on the registrar's site, usually on the day after closing. Funds for unsuccessful applications are unblocked in the usual way.
How to read huge subscription numbers
A 300× subscription on a ₹15 crore issue means about ₹4,500 crore of bids, much of it from funded or repeated applications. It tells you that many people bid, not that the company is worth the price.
Key takeaways
- Headline subscription can hide weak retail demand.
- Lottery allotment applies in oversubscribed retail categories.
- Check your status on the registrar's site.
- Huge subscription numbers on small issues are common and not a quality signal.