Basis of Allotment
Basis of Allotment is a document that explains how IPO shares are distributed among investors.
Basis of Allotment is a document released after an IPO closes, showing how shares have been allotted to different investors. It is prepared by the registrar according to SEBI guidelines.
This document helps investors understand:
- How many people applied for the IPO
- Total shares applied vs shares available
- Allotment ratio (who got how many shares)
- Distribution across categories like retail, QIB, and NII
When an IPO is oversubscribed, not all applicants receive shares. The basis of allotment clearly shows the method used to distribute shares fairly among investors.
It is usually published online and sometimes in newspapers for public access.
Example:
Suppose an IPO is subscribed 5 times in the retail category. The basis of allotment document may show that only 1 out of every 5 applicants received shares. This helps investors understand their chances and the final allocation process.