Why most retail applicants miss out in hot IPOs, how the lottery works for each category, and what actually improves your odds.
When an IPO is oversubscribed, there are more applications than shares, so allotment follows fixed SEBI rules for each investor category. Knowing those rules explains why you often miss out on hot IPOs and what actually improves your odds. You can estimate your chances for a specific IPO with the IPO allotment chance calculator.
How an IPO is split between investor categories
A book-built mainboard IPO is divided into portions for qualified institutional buyers (QIBs), non-institutional investors (NIIs, also called HNIs) and retail individual investors (RIIs). For companies that meet SEBI's profitability track record the split is typically:
| Category | Share of the issue | How shares are allotted |
|---|---|---|
| QIB (institutions) | Up to 50% | Proportionately to bids; up to 60% of this portion can go to anchor investors a day before opening |
| NII / HNI | At least 15% | One-third for bids of ₹2–10 lakh (sNII), two-thirds for bids above ₹10 lakh (bNII); draw of lots for the minimum application size |
| Retail (RII) | At least 35% | Lottery: as many applicants as possible get one lot each |
Companies that don't meet the profitability track record must offer at least 75% to QIBs, with retail capped at 10%. Many IPOs also reserve small portions for employees and for shareholders of a listed parent company.
How the retail lottery works
If the retail portion is undersubscribed, every valid application gets full allotment. If it is oversubscribed, the registrar runs a computerised draw so that the maximum number of applicants receive the minimum lot. Each winner gets one lot, and everyone else gets nothing. That is why a retail portion subscribed 50 times gives each application roughly a 1-in-50 chance, however many lots you bid for.
How HNI (NII) allotment works
Since 2022 the NII portion is split: one-third is reserved for small HNIs bidding between ₹2 lakh and ₹10 lakh, and two-thirds for big HNIs bidding above ₹10 lakh. Within each, allotment is by draw of lots for the minimum NII application size, so a bigger bid does not necessarily mean a bigger allotment in heavily subscribed issues.
Allotment in SME IPOs
In SME IPOs individual investors must apply for a minimum of two lots, and oversubscribed portions are also allotted by draw of lots. Because lot sizes are large, a single allotment usually means a bigger investment than in a mainboard IPO. See SME IPO vs mainboard IPO for the other differences.
What actually improves your chances
- Apply from more than one PAN: each family member with their own PAN and demat account is a separate lottery entry.
- Use the shareholder quota: if the IPO has one and you hold the parent company's shares on the record date, you can apply there as well as in retail.
- Bid at the cut-off price so your bid is valid at the final price.
- Approve the UPI mandate promptly; unapproved bids are not counted at all.
- One lot is enough in retail for oversubscribed mainboard IPOs; more lots do not add lottery tickets.
What does not help: applying on the first day, applying through a particular broker, or applying for the maximum retail amount.
After allotment
Allotment is finalised on T+1 and shares are credited on T+2, the same day blocked money for unsuccessful bids is released. Learn how to check IPO allotment status, or see IPOs awaiting allotment now on the allotment status page.