The excitement around IPOs (Initial Public Offerings) has grown significantly, with more and more people looking to invest in new companies. But as the number of investors has surged, many are finding it difficult to get an IPO allotment. If you’re someone who has been trying but haven’t had luck, don’t lose hope just yet. There are a few smart strategies you can use to increase your chances of securing an allotment.
Apply Using Multiple Demat Accounts (But Keep the PANs Different)
One of the most common strategies to improve your odds is by applying for the IPO using multiple Demat accounts. But here’s the catch—each account should be linked to a different PAN (Permanent Account Number). If you use the same PAN for multiple applications, all of them will be rejected.
You can apply from Demat accounts linked to your family members, like your spouse or children. For example, if you have ₹1,00,000 to invest, instead of applying the entire amount from one Demat account, split it across four or five Demat accounts, each tied to a different PAN. This way, you significantly increase your chances of getting an allotment.
Tip: Some investors also apply using their friends’ Demat accounts with their permission to further boost their odds.
Use the Shareholder Quota to Your Advantage
If you’re already a shareholder in the parent company of the IPO, you’re in luck! Many companies reserve a certain portion of their IPO for existing shareholders, which is called the shareholder quota. For example, when Bajaj Housing launched its IPO, shareholders of Bajaj Finserv and Bajaj Finance were given a special allotment. Similarly, Ather Energy is expected to offer a reserved portion for Hero MotoCorp shareholders, one of its key promoters, when it launches its IPO.
Pro Tip: The maximum amount you can apply for in this shareholder category is ₹2,00,000, even if you’re applying through other categories. So, if you’re already invested in the parent company, you have a good chance to grab some shares during the IPO.
Example to Understand Better
Imagine you have ₹1,00,000 to invest in an IPO:
Option 1: You apply for the full ₹1,00,000 from a single Demat account.
Option 2: You divide that ₹1,00,000 across 4 or 5 Demat accounts linked to different PANs.
While Option 1 limits your chances to just one application, Option 2 increases your chances of securing an allotment. The more different PAN-linked Demat accounts you apply through, the higher your probability of success.
Don’t Forget the Special Quotas
Some IPOs offer additional quotas for certain types of investors. For instance, when the Life Insurance Corporation of India (LIC) had its IPO, a special allotment was made for policyholders of LIC. So, if you fall into such a category, make sure to apply through that specific quota.
Using these simple strategies, you can boost your chances of getting an IPO allotment and make the most of your investments. Remember, applying smartly is the key!
