In India, the IPO lottery system is a fair and transparent method used to allocate shares when there is oversubscription in an initial public offering. When a company goes public and receives more applications than the number of shares available, the allocation is done through a computerized lottery system.
The process begins with investors applying for shares through their demat accounts and bank accounts. After the IPO subscription period closes, if the issue is oversubscribed, the registrar to the issue conducts a lottery to randomly select applicants who will receive shares.
For retail investors in India, the lottery system ensures equal opportunity regardless of the application size or timing. The system is regulated by SEBI （Securities and Exchange Board of India） to maintain transparency and fairness in the allocation process.
Successful applicants receive shares in their demat accounts, while unsuccessful applicants get their money refunded. The entire process typically takes about 10-15 days from the IPO closing date to the final allotment and listing on stock exchanges. |
