How IPO Allotment Works: Lottery, Quotas and Your Chances

Updated 20 Oct 2026 · 2 min read

When more people apply than there are shares, not everyone gets shares. Here is how they are shared out, and how to improve your chances.

The quotas

An IPO’s shares are split into categories. In most mainboard IPOs:

If a company does not meet SEBI’s profit track record, at least 75% goes to QIBs, up to 15% to NIIs and up to 10% to retail. Some IPOs also keep a small part for employees and for shareholders of a parent company. SME IPOs have their own rules.

Retail allotment is a lottery

If the retail category is oversubscribed, SEBI’s rules say that as many retail applicants as possible should get one lot each. A computerised lottery picks the winners, and each winner gets one lot, even if they applied for more.

So if retail is subscribed 20 times and most people applied for one lot, about 1 in 20 applications wins.

NII allotment

One-third of the NII quota is for bids of ₹2–10 lakh (small NII) and two-thirds for bids above ₹10 lakh (big NII). When they are oversubscribed, winners get the minimum NII application, chosen by lottery.

QIB allotment

QIBs get shares in proportion to their bids. Up to 60% of the QIB part can go to anchor investors, a day before the IPO opens.

How to improve your chances

• Apply for one lot at the cut-off price. In retail, more lots don’t help.
• Apply from family members’ accounts. Each PAN is a separate entry in the lottery.
• Use the shareholder quota if you hold shares of the parent company on the date in the offer document.
• Avoid rejection: one application per PAN, and approve the UPI mandate in time.

When will you know?

Allotment is finalised one working day after the IPO closes. Shares reach demat accounts the next day, and the stock lists the day after. Read how to check allotment status, or see allotment dates of recent IPOs.

For information only, not investment advice.