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Every IPO cycle, thousands of retail investors apply, watch the subscription numbers climb, and then check the basis of allotment only to find they got nothing — even for an issue that wasn't wildly oversubscribed. The reason almost always comes down to one thing: retail, NII, and QIB shares aren't allotted the same way.
This guide explains exactly how each investor category gets its shares allotted, why the retail process is a genuine lottery rather than "first come first served," and what actually determines whether you get shares this time.
The Three Investor Categories, and Why Allotment Differs
Every mainboard IPO reserves shares across three broad investor categories, each with its own minimum allocation and its own allotment method:
- Retail Individual Investors (RII): Applications up to ₹2 lakh. Minimum 35% of the net offer is reserved for this category in most issues.
- Non-Institutional Investors (NII/HNI): Applications above ₹2 lakh, split further into sNII (₹2 lakh–₹10 lakh) and bNII (above ₹10 lakh) buckets. Minimum 15% reserved.
- Qualified Institutional Buyers (QIB): Mutual funds, FIIs, banks, insurance companies, and other institutions. Maximum 50% of the net offer.
SEBI deliberately uses a different allotment mechanism for the retail category than for NII and QIB, and understanding why explains almost everything about why you did or didn't get shares.
Retail Allotment: The Lottery System
When the retail category is oversubscribed, SEBI requires registrars to run a computerised lottery to decide who gets the minimum lot. Here's the key detail most investors miss: every valid retail application is treated as exactly one lottery ticket, regardless of how many lots you applied for. An investor applying for 1 lot has the same statistical odds as one applying for the maximum 13 or 14 lots allowed under the ₹2 lakh retail cap.
Registrar counts total valid retail applications
After the issue closes, the registrar (KFin Technologies or Link Intime, typically) tallies every valid retail application received across all lot sizes.
Registrar calculates how many minimum lots are available
Total retail shares reserved ÷ minimum lot size = number of investors who can be allotted one minimum lot each.
Computer-generated lottery selects winning applications
If applicants exceed available minimum lots, a random computerised draw — witnessed and certified by the stock exchange — selects which applications get allotted. This is why it's often called the "IPO lottery."
NII and QIB Allotment: Proportionate Basis
Unlike retail, the NII and QIB categories don't use a lottery — they use a proportionate (pro-rata) allotment. Every applicant in these categories gets a share of the available shares in proportion to the size of their bid, subject to a minimum bid lot.
If the NII category is subscribed 10x, every NII applicant gets approximately 1/10th of the shares they applied for (rounded to the nearest lot). Bidding for a larger amount genuinely increases your allotted quantity in these categories — which is the opposite of how the retail lottery works.
Retail vs NII/QIB Allotment — Side-by-Side
| Factor | Retail (RII) | NII / QIB |
|---|---|---|
| Allotment method (if oversubscribed) | Computerised lottery | Proportionate to bid size |
| Does applying for more lots help? | No — one ticket per applicant regardless of lot size | Yes — larger bid generally means larger allotment |
| Minimum guaranteed if undersubscribed | Full allotment to every valid applicant | Full allotment to every valid applicant |
| Multiple applications from same PAN | All such applications rejected | All such applications rejected |
| Category reservation (typical mainboard) | Minimum 35% of net offer | NII: min 15% · QIB: max 50% |
The T+3 Allotment Timeline
Since December 2023, SEBI has mandated a faster T+3 listing timeline for all mainboard and SME IPOs, replacing the older T+6 cycle. Here's what happens after the issue closes (T = closing day):
- T+1: Basis of allotment is finalised and published by the registrar and stock exchange.
- T+2: Refunds are initiated for non-allottees (or the UPI mandate is released), and shares are credited to successful applicants' demat accounts.
- T+3: Shares list and begin trading on BSE/NSE.
You can check your own allotment status on the registrar's website, the exchange's website, or your broker's app as soon as it's published — IPOBee links directly to the registrar's allotment-status page from every IPO's detail page.
Legal Ways to Improve Your Odds
Since the retail lottery treats every applicant equally regardless of lot size, the only way to genuinely increase your number of "tickets" is to apply through more than one eligible applicant:
- Apply from family members' separate demat accounts — spouse, parents, or adult children, each with their own PAN and demat account, are each a separate lottery entry. This is completely legal.
- Apply at the cut-off price for book-built issues, so your application isn't rejected if the final price is fixed at the top of the band.
- Approve your UPI mandate promptly — a mandate not approved before the deadline results in your application being treated as a technical rejection, not a lottery loss.
- Maintain sufficient bank balance until the mandate is either debited or released, so the block doesn't fail.
Frequently Asked Questions
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