IPO subscription reflects the number of shares and people bidding for IPO shares offered by a company.

1. IPO Subscription Process
2. IPO Subscription Timing
3. IPO Subscription Charges
4. IPO Bidding Category
5. IPO Subscription Calculator
6. IPO Subscription Types
7. IPO Subscription and listing price
8. IPO Subscription and GMP
9. IPO Subscription Historic Data

IPO subscription indicates demand for an IPO. The IPO subscription data shows the number of shares applied for by all investors during the IPO subscription period. This data is tracked across all investor categories and is available in real time.

The IPO subscription period is 3-10 business days, depending on the type of IPO. The live IPO subscription status is available on chittorgarh.com, BSE and NSE websites.

IPO subscription reflects the total number of public subscriptions in an IPO. It shows the demand for an IPO in terms of the number of shares based on applications received. The IPO subscription number changes throughout the IPO window and is finalized after the IPO bidding period closes.

How IPO subscription data helps investors?

• Check the total demand for the IPO shares. Higher demand may indicate a good IPO and vice versa.
• This is one of the most important factors in making an IPO investment decision. It helps to build an IPO investment strategy.
• Live IPO subscription data help investors choose the reserved category (i.e. retail, NII, employee, shareholder) in an IPO to maximise profits.
• Plays a role in the development of the IPO grey market price.
• Helps decide whether to borrow for an IPO investment.
• Subscription data helps investors select an IPO where there is a higher chance of allocation. The higher the subscription, the lower the chance of allotment.

IPO Subscription Process

The IPO subscription process is a way for investors to place bids for IPO shares. The following parties are involved in the IPO bidding process:

1. Investors (Individual investors, QIB)
2. Brokers/banks (e.g. Zerodha, ICICI Bank)
3. Stock Exchanges (BSE, NSE)
4. Registrar or RTA (e.g. Link Intime, Karvy)

Steps of IPO Bidding Process

The IPO bid is made online on the platform provided by the stock exchanges (i.e. BSE, NSE) via stock broker or banks. The subscription process for the IPO begins on the opening day of the IPO and continues until the closing day of the IPO. While an investor can submit the online offer for shares at any time (24 hours), the broker/bank send it to the Exchange between 10:00 am and 05:00 pm. The following are the key steps involved in making a bid for IPO share offer:

1. Investors submit the bid for the IPO shares to a stock broker or bank.
2. The broker/bank consolidates all applications received and forwards them to the stock exchange on a regular basis.
3. The IPO bidding platform of the exchange collects the applications and publishes the demand (subscription) in real time between 10 am and 5 pm.
4. Once the issue is closed for subscription, the Exchange forwards this data to the registrar for the issue (RTA).
5. The IPO Registrar allocates shares based on SEBI regulations and the information in the RHP document.
6. The registrar publishes the allotment status on its website and sends an allotment email.
7. The registrar instructs banks to release unused blocked funds.
8. The allocated IPO shares are transferred to investors one day before the IPO share is listed at stock exchange.

IPO Subscription Timing

The investor may submit the bid for the IPO shares to the stockbroker or the bank at any time as long as the public issue is open for bidding. The IPO bidding platform of the stock exchange is open from 10 am to 5 pm. Even if the bank/broker accepts the bids for 24 hours, the bids will only be submitted to the stock exchanges between 10 a.m. on the opening day of the IPO and 5 p.m. on the closing day of the IPO.

Time to submit the bid for IPO shares:

• Investor to broker/bank: Anytime time while IPO is open (24 hours)
• Bank to Stock Exchanges: Between 10 AM of the IPO open date to 5 PM of the IPO close date

Note:

• The UPI mandate has to be approved first and then bank/broker will upload bid to exchange.
• The banks/brokers close IPO subscription window on the last day around 2:00 to 3:00 pm. They need a time buffer to process the applications and send them to the exchange before 5pm.

IPO Subscription Charges

The service of placing bids for IPO shares is offered free of charge by stockbrokers and banks. When shares are allotted in an IPO, the broker may charge a brokerage fee and taxes when the investor sells the shares on the exchange.

Stock brokers/banks receive a small amount from the issuing company for processing the IPO application.

IPO Bidding Category

IPO investors are classified in three broad categories. Depending on the type of investor and the amount of investment, the investor can participate in an IPO through one of the below categories.

1. Retail individual investors (RII)
2. Non-institutional investors (NII)
3. Qualified institutional investors (QIB)
4. Employee
5. Shareholders
6. Anchor Investors

Note:

• Individual investors who participate in an IPO with less than Rs. 2 lakhs fall under the retail investor (RII) category.
• NIIs are divided into Small NIIs (bids below Rs 10L) and Big NIIs (bids above Rs 10L) based on their investment amounts.
• Anchor investors, investing more than Rs 10 crores in an issue, are part of the QIB category.
• In a few IPOs, there is a special reservation for employees or other reserved categories such as shareholders as defined in the RHP.

IPO Subscription Calculator

The IPO Subscription calculator helps you know the number of times an issue has been subscribed. To determine the IPO subscription rate, investors need the details of the shares offered per category and the bid numbers. Investors can find this information on the stock exchange’s website.

Investors can also refer to IPO Subscription Live Figures on the Chittorgarh website.

Generally, investors do not calculate these numbers, as IPO subscription times can be easily found on the above websites. The calculation example below is used to understand the derivation of the IPO subscription rate.

Sula Vineyards IPO Subscription

Sula Vineyards came up with a public issue of 18,830,372 equity shares in Dec 2022.

Points to Note:

• IPO subscription times are calculated by dividing the number of shares for which bids have been received by the number of shares offered.
• The number of shares offered is readily available in the RHP for a fixed-price offering. For book-built issues, these numbers must be derived based on the allotment ratio stated in the offering documents, which is generally 35% for RII, 15% for NII, and 50% for QIB.
• Data on bids received is available on the NSE and BSE websites.
• In certain cases, the investor category may also include a reserved category for employees. These details can be found in the bidding documents.
• The total number of shares offered to the public does not include the market maker portion in SME IPOs and the anchor investor portion in Main Board IPOs.

IPO Subscription Types

IPO subscription times indicate the demand for an IPO. IPO subscription type is based on the number of subscriptions to an IPO. If the IPO subscription time is greater than 1, the issue is considered oversubscribed; If it is less than 1, the issue is undersubscribed.

An IPO is divided into two main types:

1. Oversubscribed IPOAn IPO in which the number of bids received in the form of shares is greater than the size of the issue is called oversubscribed. In other words, the demand for shares is greater than the supply of shares. In the above subscription table for the IPO of Sula Vineyards, the IPO is oversubscribed a total of 2.33 times.The benefits of oversubscribed IPOs are as below
   • Opportunity for companies to raise more capital by offering more shares to meet demand.
   • Possibility of premium listing.
   • Good sign for the company.
2. Undersubscribed IPOAn undersubscribed IPO is an IPO in which the number of shares applied is less than the number of shares offered. An under subscription is when the demand is less than the supply.For example, a company offers to issue 10 lakhs shares at Rs 90. However, the public applications received are for only 8 lakhs shares, the issue is said to be undersubscribed.

IPO Subscription and listing price

Subscription numbers for IPO shares help predict the share price once trading begins on exchanges after the IPO shares are listed. An oversubscribed IPO indicates higher demand for IPO shares, leading to a listing at a premium. However, in addition to demand, there are many other factors that influence the share price (see below):

• Market Sentiments.
• Grey Market Premium.
• Future Prospects of the company.
• Promoter offload of shares.
• Change in policy/economic factors related to the industry.

Refer to the data on IPO Subscription vs Listing gain to get more idea on their relation.

IPO Subscription and GMP

Some IPO stocks are traded over-the-counter (unofficially) before they get listed on the stock exchanges. The premium at which they trade is called the grey market premium (GMP). The GMP indicates the premium over the issue price that investors are willing to pay for the IPO shares.

A higher GMP indicates higher demand for IPO shares, which leads to higher IPO subscription. Conversely, a lower GMP indicates low demand, leading to lower IPO subscription.

IPO Subscription Historic Data

• Mainboard IPO Subscription Status Live
• SME IPO Subscription Status Live
• NCD Subscription Status Live
• Most Subscribed IPO in India (All Time)
• Most Subscribed IPOs (Yearly)
• Top 10 Mainboard IPO by Subscription (Yearly)
• Top 10 SME IPO by Subscription (Yearly)
• IPO Subscription vs Listing Gain

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Frequently Asked Questions

1. What does IPO subscription mean?

The IPO subscription reflects the number of times an issue has been subscribed. IPO subscription numbers are calculated for each category of investor and also on an overall basis.

For example, a company offers 10 lakh shares but has received applications for 50 lakh shares from the investors. In this case, the issue is subscribed 5 times (5x).

2. How IPO subscription works?

The subscription of the IPO is calculated based on the applications submitted by investors. The IPO subscription number indicates the demand for an IPO. It is determined by dividing the number of shares applied for by the number of shares offered.

Based on the applications received, the IPO may be undersubscribed or oversubscribed. If the demand for shares is greater than the shares offered, the issue is oversubscribed. If the demand for shares is less than those offered, the issue is undersubscribed.

The exchanges update the subscription status in real-time on their website based on the bids received.

3. When can I get IPO live subscription data?

You can access the IPO live subscription data online while the issue is open for subscription between 10am and 5pm. IPO subscription data is provided by the stock exchanges. Subscription numbers are constantly changing based on bids received by the exchanges and will be finalized at the close of the IPO.

4. How to check IPO subscription status live?

You can access the IPO live subscription data online at any time. IPO subscription data is updated between 10:00 a.m. and 5:00 p.m. as long as the IPO is open for subscription.

Steps to check live IPO subscription status

1. Visit the website at www.chittorgarh.com.
2. From the home page, click on the IPO you want to view.
3. Click on the ‘Subscription’ tab.
4. Check the live subscription data.

5. What happens after IPO subscription?

Exchanges close bids for IPO shares at 5 p.m. on the issue closing date. They provide the bid data to the registrar for further processing. Once the registrar receives the data, it proceeds with the following activities:

• Review applications to accept valid bids and reject invalid/wrong applications.
• Complete the basis of allotment in consultation with the exchanges.
• Refund of application money in case of partial allotment or non-allotment.
• Credit the Demat account of the allottees.

The shares are then listed on the exchange and normal trading of the shares begins.

6. How does IPO subscription work?

IPO subscription is calculated on real time basis by the exchanges (BSE and NSE) based on the bids received on their respective platforms during the IPO bidding session.

IPO subscription numbers are segregated into investor category-wise which shows the demand for an IPO by each investor category.

IPO subscription figures are calculated by dividing the total number of bids received in terms of the number of shares by the number of shares offered.

For example, a company offers 70,000 shares, of which 35,000 shares are offered to QIBs, 10,000 shares are offered to NIIs, and the remaining 25,000 shares are offered to RIIs.

The applications received against the above offer are 70,000 shares from QIB investors, 9,000 shares from NII and 30,000 shares from RII.

Thus, we can say that,

• IPO QIB subscription is 2x times. (70,000/35,000)
• IPO NII subscription is 0.9x times. (9,000/10,000)
• IPO RII subscription is 1.20x times. (30,000/25,000)

Overall, the IPO is said to be 1.55x times oversubscribed.

7. How can you get an oversubscribed IPO?

There is no rule of thumb or set procedure for obtaining a guaranteed allotment in an oversubscribed IPO.

You can follow some best practices to improve your chances of getting an oversubscribed IPO:

• Check IPO subscription status before applying.
• Avoid input errors when applying to avoid rejections.
• Apply through different accounts of family members.
• Do not forget to approve the UPI mandate in case of UPI application.
• Use employee or shareholder quota if possible.
• If multiple IPOs are open, allocate the amount based on subscription status and GMP.

8. How do you buy an oversubscribed IPO?

One can buy the oversubscribed IPO online through UPI or ASBA through your bank or broker. The process to purchase the IPO shares remains the same regardless of the subscription status.

See the IPO Application Procedure via UPI or ASBA for the detailed procedure.

9. What does oversubscribed IPO mean?

An oversubscribed IPO means that more applications have been received from investors than shares offered in an IPO. It shows that demand is greater than supply.

Example: A company offers 10 lakh shares in an IPO and receives bids for 30 lakh shares. In this case, the issue is considered to be three times oversubscribed.

It’s very common for IPOs to be oversubscribed multiple times. Some IPOs are oversubscribed up to 600 times.

The oversubscription of an IPO depends on many factors:

• Size of the issue (small issues are easily oversubscribed).
• Bull market.
• Higher demand for the company.
• Reasonable price for the IPO shares.
• Trusted promoters such as Tata or L&T.

10. What does undersubscription mean?

Undersubscription means that the number of applications received is less than the number of shares offered in an IPO. Undersubscription indicates the demand for the shares is less than the supply.

For example, a company offers 10 lakh shares but has received applications for only 5 lakh shares. In this case, it is called an under-subscription.

If an issue is not fully subscribed, the company has the following options:

• Extending the deadline for closing the issue. An issue may remain open for up to 10 days.
• If the issue is a partial or full offer for sale (OFS), the size of the OFS issue may be reduced and the issue successfully closed.
• The company may also withdraw the IPO.

11. What is under subscription and oversubscription of shares?

Over Subscription Vs Under Subscription in IPO

Undersubscription and oversubscription indicate the number of times an issue has been subscribed. The main differences between oversubscription and under subscription are explained below for a better understanding of the terms.

12. Can IPO subscription be cancelled?

For investors,

• An IPO application in the retail category may be cancelled by the investor at any time prior to the closing date of the offering.
• An IPO application in the NII and QIB categories cannot be withdrawn. The bid price modification (upsize) is possible as long as the issue is still open.

For companies,

If an IPO isn’t fully subscribed or doesn’t meet the minimum subscription criteria, the company may extend the deadline for closing the offering or reduce the OFS size. If this doesn’t succeed, or if the company decides to cancel the IPO for other reasons, it may do so at any time.

13. Can IPO be subscribed after market hours?

Yes, investors can place a bid for IPO shares even after the market closes (except on the last day), provided the broker/bank allows them to place the order. Orders placed after market close will be forwarded to the exchange on the next business day.

Note that the IPO bidding platform of the Exchange is open from 10 am to 5 pm. Even if the broker/bank accepts your online IPO application outside the exchange’s opening hours, the IPO application will not be submitted to the exchange until 10 a.m. the next day.

14. How to check IPO subscription status in NSE?

The NSE website displays live subscription data under the IPO tab in Market watch. Note that bids for mainboard IPOs are submitted on both the BSE and NSE IPO bidding platforms. The NSE website only displays the data of bids received on the platform in real time.

You can check the consolidated live IPO subscription status on Chittorgarh.com.

Steps to check the IPO subscription status on NSE

1. Visit NSE website nseindia.com
2. Click on the ‘Market Data’ tab and ‘New Public Issues’.
3. Open the desired IPO for which you want to check the subscription status.
4. Select the category as NSE Bid details or Consolidated Bid details.
5. Click on bid details.
6. Investors can see the total number of bids received by different investors.

15. What is the IPO subscription time?

The IPO subscription period begins at 10 a.m. on the day the IPO opens for subscription and ends at 5:00 p.m. on the last day of the IPO.

Investors may subscribe for the IPO at any time during this window. Bids submitted after 5:00 p.m. (except on the last day) will be uploaded to the Exchange on the next business day. Some brokers and banks allow bids to be submitted only between 10 am to 5 pm.

The last day cut-off time for IPO application may vary from bank to bank and broker to broker. Therefore, check with your broker/bank for their respective closing times.

16. What happens if the IPO is not fully subscribed?

If the issue is more than 90% subscribed but not fully subscribed, all investors will receive the full allocation.

If the issue does not reach the minimum subscription level of 90%,

• The issuer may extend the deadline for closing the issue and reduce the issue price.
• The issuer may reduce the Offer for Sale portion of the issue.
• If this is not successful, the issuer must return the entire subscription amount to all investors. The issue is cancelled.

17. What is under subscription of shares?

An under-subscription of shares occurs when an IPO receives fewer applications than shares offered.

For example, if a company offers 50,000 shares and receives applications only for 40,000 shares, it is under subscription.

In the case of under subscription, all investors receive the allotment. However, if the issue does not reach the minimum subscription rate of 90%, the issue is cancelled and the issuer refunds all money to the investors.

18. How much IPO subscribed?

You can check the IPO subscription status on Chittorgarh.com.

IPO Subscription is the number of times a public issue is subscribed at BSE and NSE. IPO subscription indicates the demand for an IPO.

If the IPO subscription times is more than 1, the issue is said to be oversubscribed. If the IPO subscription times is less than 1, the issue is said to be undersubscribed and if it is exactly 1, the issue is said to be fully subscribed.

19. What happens if IPO is fully subscribed?

When an IPO is fully subscribed, not all investors may receive an allotment.

The allotment in a fully subscribed or oversubscribed IPO is done on proportionate or lottery based on the level of oversubscription and investor category.

A fully subscribed IPO occurs when all offered shares are sold to investors. This is a good sign for an issuer whose IPO is attracting great interest from investors.

20. What is overall subscription status in IPO?

Total subscriptions are the total number of bids received from all investors in relation to the total number of shares offered in an IPO.

The IPO subscription status can either be oversubscribed or undersubscribed. If the total number of bids received is more than the number of shares offered, the IPO is said to be oversubscribed and vice versa.

The IPO subscription status changes throughout the IPO window and is finalized at the end of the offering period.

21. What is the minimum subscription for IPO?

The minimum subscription for an IPO is the minimum number of shares that a company must sell by the end of the IPO period from the total issue size.

Under SEBI regulations, each company must receive applications for at least 90% of the issue size. If the issuer does not meet the minimum subscription of 90%, it must refund the entire application amount to investors.

22. Is oversubscribed IPO good?

An oversubscribed IPO is good because an oversubscription is a sign of a good IPO. Check our IPO Subscription vs Listing Gain report for more details.

In an oversubscribed IPO, the demand for the shares is greater than the number of shares offered.

Investors believe that the company has good prospects, and therefore, investor interest in the IPO is greater as everyone is eager to buy the company’s shares.

In an oversubscribed IPO, the allotment to all investors is not guaranteed.

23. What is oversubscribed IPO?

An oversubscribed IPO is an IPO for which more bids were received than shares offered.

The oversubscribed IPO indicates a high demand for the stock. This is a positive sign for the company, as many investors want to buy the IPO. Allotment in an oversubscribed IPO is not guaranteed.

24. What happens when IPO is oversubscribed?

If the IPO is oversubscribed, the allotment happens on a proportionate basis or a lottery basis based on the extent of the subscription and investor category.

If the number of investors is more than the maximum number of allottees, the allotment will be made on a lottery basis, else it will be done on a proportionate basis.

Learn more about allotment in the IPO Allotment Chapter.

25. How to know if IPO is oversubscribed?

Investors can check the IPO subscription status to know if an IPO is oversubscribed.

When the number of bid offers is more than the number of shares offered by the issuer, the issue is said to be oversubscribed. When the IPO subscription times is more than 1, the IPO is oversubscribed.

For example, if a company offers 10,000 shares and receives bids for 20,000 shares. The issue is considered 2x oversubscribed. (20,000/10,000). The IPO subscription is calculated both at the level of individual investor categories and on an aggregate basis.

26. Can I get multiple lots in an oversubscribed IPO?

When an IPO is oversubscribed, it is not certain that you will get multiple lots. Sometimes it is also difficult to get one lot.

If the number of investors is less than the maximum number of allottees, one lot is assured and then it is allocated proportionally.

However, if the number of investors is higher than the maximum number of allottees, one lot is not guaranteed either, because the allotment is then made on a lottery basis.

27. How many lots to apply in oversubscribed IPO?

It is good to apply for one lot or a little more in an oversubscribed IPO.

It does not make sense to apply for larger amounts thinking you’ll get more lots, because that would mean blocking larger amounts. On the other hand, it is best to place bids for smaller lots through different accounts of friends or relatives to increase your chances of getting an allotment.

28. What happens if IPO is underscribed?

If the company does not receive the minimum subscription of 90% of the total issue size by the close of the offering, the company must refund the entire subscription amount to investors.

All investors will receive the full allotment if the subscription is more than 90% but not fully subscribed.

29. Where to check IPO subscription status?

IPO Subscription can be checked on Chittorgarh.com. To check the live subscription data during the offering period follow the below steps:

1. Open Chittorgarh.com home page.
2. Select the IPO.
3. Click on the Subscription Tab.
4. Scroll down and check the subscription numbers and details.

The investors can place a bid for IPO shares with any of the exchange (i.e. BSE or NSE). Each exchange also provides live IPO subscription status on their websites for the bids received by them.

Steps to check IPO subscription status BSE:

1. Open the BSE live public issues website.
2. Click on live IPO.
3. Click on BSE demand schedule.

Steps to check IPO NSE subscription status:

1. Open NSE IPO page website.
2. Click on IPO.
3. Click on Bid Details.

Glossary

1. IPO Lot SizeLot Size refers the total number of shares investor can buy in one transactionRead more
2. IPO AllotteeIPO allottee is the person to whom an allotment is made in an IPORead more

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About Post Author

Maria Stanly

aware@srvibes.com

http://www.srvibes.com

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