How IPO allotment works in India: lottery, categories, odds

Updated 26 October 2026 · 6 min read

IPO allotment is the process that decides who gets shares after an issue closes. If a category is not fully subscribed, every valid applicant in it gets what they bid for. If it is oversubscribed, the shares are shared out by fixed SEBI rules, and for retail and HNI investors that means a computerised lottery for the minimum application size. That is why a popular IPO can leave most retail applicants with nothing, even though their bids were perfectly valid.

This guide explains how the issue is divided between investor categories, how the retail lottery and the NII draw work, how to estimate your own odds with a simple worked example, and what happens on each day between the closing bell and listing.

Step 1: the issue is split into categories

Before anyone bids, the offer document fixes how many shares go to each investor category. Each category is then allotted separately: a crowded retail book does not take shares from the QIB book, and a weak HNI book does not help retail applicants directly (though unsubscribed shares can sometimes be moved to another category, as the RHP explains).

Step 2: invalid bids are removed

The registrar first cleans the data. Bids whose UPI mandate was never approved, duplicate bids from the same PAN in a category, bids below the final issue price, and bids with mismatched PAN or demat details are thrown out. Only what is left counts as a valid application. This is why the final number of retail applicants used for allotment is often lower than the bid count you saw during the subscription period.

Step 3: the retail lottery

SEBI rules aim to give the minimum lot to as many retail applicants as possible. The registrar works out how many minimum lots the retail portion can be divided into and compares that with the number of valid retail applications.

• If there are more lots available than applicants, every valid applicant gets one lot, and the remaining shares are shared proportionately among those who applied for more than one lot.
• If there are more applicants than lots, a computerised lottery picks the winners, and each winner gets exactly one lot.
• An applicant who bid for ten lots goes into the draw once, just like someone who bid for one lot. Extra lots matter only if shares are left over after everyone has received one lot.

The draw is run by the registrar and the basis of allotment is approved by the designated stock exchange. Neither your broker nor the time at which you applied has any effect on it.

Step 4: the NII draw

Since 2022, the NII portion has worked in a similar way. It is split into small NII (applications above ₹2 lakh and up to ₹10 lakh, one-third of the portion) and big NII (above ₹10 lakh, two-thirds). In each part, if it is oversubscribed, a draw of lots gives the minimum application size (just above ₹2 lakh for sNII, just above ₹10 lakh for bNII) to as many applicants as possible. Bidding ₹50 lakh in big NII does not buy fifty times the chance; it is still one ticket in the draw for the minimum bNII size, with any leftover shares shared proportionately.

QIBs are different: their portion is allotted proportionately, so an institution that bid for twice as many shares gets roughly twice as many.

A worked example of your odds

Here is an illustration with made-up numbers. Say an IPO has a price band of ₹100–105 and a lot of 142 shares, so one lot costs ₹14,910 at the upper end. Say the retail portion is 35 lakh shares. That is about 24,650 lots (35,00,000 divided by 142).

1. Suppose 12 lakh valid retail applications are received after invalid bids are removed.
2. Lots available divided by applicants: 24,650 ÷ 12,00,000 is about 0.02.
3. So each applicant has roughly a 2% chance, or about 1 in 49, of receiving one lot.
4. An applicant who bid for 13 lots (just under ₹2 lakh) has the same roughly 1 in 49 chance, and would still receive only one lot if picked.

Notice that the subscription figure on its own can mislead. If the retail category shows "60 times subscribed" and many people bid for several lots, the number of applications is much smaller than 60 times the lots on offer, and the real odds per applicant can be better than 1 in 60. The live subscription by category on each IPO page, read together with the application count where it is published, gives a better feel than the headline multiple.

The timeline after the issue closes

What your allotment result means

• Allotted, with a number of shares: you won the draw; only the amount for those shares is debited.
• Not allotted or 0 shares: your bid was valid but was not picked; the full block is released.
• Rejected, with a reason: the bid failed a technical check; nothing is debited.
• No record found: usually no valid bid reached the registrar, often because the mandate was not approved.

If you tapped "＋ I applied" on the IPO page, My IPOs follows allotment and listing for you and your family members, with a one-tap allotment check using PANs saved only on your own device.