NSE IPO Allotment Is Here: What Happens Between Allotment and Listing?

Just as you’ve applied for an IPO and been allocated shares, that doesn’t mark the end of the matter—there are still several important steps before the newly allocated shares start trading on the NSE.

From the time when the allotment is finalised until the shares are credited to your demat account and their eventual listing, here is what takes place in between.

1.The basis for the allotment has been finalised.

When the IPO has been completed, the applications will be processed, and the basis for allocation will be finalised together with the designated stock exchange.

In an IPO that has more applicants than there are shares available, all applicants will not necessarily be awarded shares. The number of shares allocated will vary according to the category, the number of shares on offer, and the method used for allocation.

The registrar handles the applications and carries out the allotment in accordance with the relevant rules and the offer document.

2. Check the status of your IPO allotment

When information about the allotment is available, investors can find out if shares have been allotted to them.

NSE offers a facility for checking IPO bids and allotments whereby investors can verify the details of their bids and obtain the allotment information supplied by the registrar.

The next thing for you to do if you get an allotment is have the shares credited to your demat account.

3. The shares will be credited to your demat account.

The number of shares assigned are credited electronically into the investor’s demat account.

At the same time, the funds associated with shares which were not allotted are released via the relevant ASBA/UPI procedure. The NSE states that with ASBA, the application money stays blocked in the investor’s account until the basis of allotment has been finalised; at that point, the amount corresponding to the allotted shares is transferred and the rest of the money remains unblocked.

Therefore, if you haven’t received an allotment you have no need to ask for a refund manually as part of the usual ASBA process.

4. Listing and Trading Start

Once the allotment and demat credits have been dealt with, the company carries out the required listing procedures with the stock exchange.

The present public-issue procedure with the NSE involves the company, after allotment, submitting the required listing documents together with confirmation of the dematerialised shares; the NSE then publishes the necessary market communication regarding the listing and trading.

For eligible issues, the process follows a timeline which involves allotment on T+1, demat credit and the completion of listing formalities on T+2, and then the listing itself on T+3, where T is the working day on which the issue closes. The actual timelines, however, may differ depending on the issue and the relevant requirements.

What Should Investors Do Before Listing?

If you receive an IPO allotment, check your demat account and keep an eye on official exchange and company communications.

Most important of all, it should be remembered that an allotment does not ensure a specific listing price or a future return; the share starts to be traded on the secondary market, where its price is set by the demands of and supply in the market.

If you are interested in keeping track of upcoming IPOs or wish to manage your investments on a single platform, Dhanush 2.0 by Ashika will give you access to market and investment services relating to IPOs, provided that you meet the relevant eligibility and account requirements.

The IPO allotment might be exciting, but it is at the time of the listing that the market journey actually starts.

Disclaimer: Investments in the securities market are subject to market risks. Read all related documents carefully before investing. Registration granted by SEBI and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Sources: NSE India, SEBI