How IPO allotment really works, and why applying for more rarely helps

“Subscribed 22 times” sounds like one big queue. In reality there are several separate queues, and yours may be far shorter than the headline suggests.

Think of a train, not a queue

An IPO’s seats are divided into coaches before anyone books. A coach being full doesn’t tell you about the one next to it.

Here’s how Jio’s coaches were arranged, from page 72 of its Prospectus, with the final subscription as reported by Groww.

Overall subscription was 22.19 times, a figure that describes nobody’s actual experience. A retail applicant faced 2.72x, and an institution faced about 26 times that.

What happens inside each coach

QIBs: mostly proportional. Institutions generally get shares in proportion to what they asked for. So a bid for 70 times more gets roughly scaled down. Part of this quota (up to 60%) can be placed with anchor investors before the public opens.

Non-institutional: split in two. Jio’s portion was divided into one-third for bids of ₹2 lakh to ₹10 lakh, and two-thirds for bids above ₹10 lakh. Allotment in each works around a minimum application size.

Retail: built around the minimum lot. The Prospectus says each retail investor’s allocation shall not be less than the minimum bid lot, subject to availability, with anything left over allocated proportionately. In practice, if there aren’t enough lots for everyone, it comes down to a draw.

Your odds, worked out

Let’s do the arithmetic for Jio’s retail portion.

• Retail portion: 8,50,37,327 shares
• Lot size: 12 shares, so ₹13,428 at ₹1,119
• That’s about 70.9 lakh minimum lots available

At 2.72x, demand was 2.72 times the shares available. If every applicant had bid for only one lot, about 1 in 2.72 would have got one, or 37%. The real number depends on how many people applied and how large their bids were, because the table above counts rupees rather than people. Since many apply for more than one lot, the true number of applicants would be smaller, and the actual odds could be better.

Treat that as a rough illustration. The basis of allotment, published after the issue, records the real figures.

Why bidding for more rarely helps

The maximum retail bid in Jio’s case was 14 lots (168 shares, ₹1,87,992), as 15 lots would cross ₹2 lakh. But if the book is heavily oversubscribed, a person bidding 14 lots and a person bidding 1 lot are both generally aiming for the same minimum allotment. The difference is that the larger bidder has more money blocked.

What else affects you

• Cut-off price. Retail investors can tick “cut-off” to accept whatever final price is set. If you bid below the final price, your bid drops out.
• ASBA. Your money stays in your own account, blocked until allotment. It works like a hotel’s hold on your card.
• Multiple applications. Applying more than once from the same PAN can get your bids rejected, unless the document allows it. Jio let eligible Reliance shareholders bid in their own quota as well as the retail or non-institutional portion, and said this wouldn’t count as a multiple bid. Such rules are specific to each offer.
• Timeline. Jio’s bidding closed on 23 October 2026, and shares listed on 28 October. Your blocked money is released for whatever isn’t allotted, so check your bank account and demat.

What not to conclude

A subscription number measures how many people wanted shares at that price. Retail’s 2.72x against QIBs’ 70.55x is interesting, but I wouldn’t treat it as proof that institutions “knew better”. Institutions bid for size knowing they’ll be scaled back, so high multiples partly reflect that behaviour.

For your own application, the useful order is: read the offer first, decide whether you’d want the shares at that price, and only then think about the odds. Here’s how to read the document.

IPO basicsJio

Maksud Ahmad Khan

Finance fresher and NISM Series XV Research Analyst, on the PGPM at ICFAI Business School, Mumbai. I write about IPOs, filings and Indian markets. Say hello.