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Why don’t you get shares in IPO? This is the reason

Recently Tata Tech’s IPO came, which was subscribed 70 times. So many people placed bets on the IPO of this company that when it was listed, its price started touching the sky. There were many people who were not allotted IPO. Have you ever thought that your IPO is not allotted, but other people’s IPOs get allotted. Does this just happen to you? In today’s story, we will answer this question of yours, about which the Chairperson of SEBI has mentioned.

What did the SEBI chairperson say?

Madhavi Puri Buch has cited the corruption of the price-discovery system as the reason for stopping the allotment of shares on pro-rata basis in SEBI’s Initial Public Offer (IPO). Speaking about this at the CII Global Economic Policy Forum, he said that in the pro-rata system, IPO allotment is done proportionately, which allots all the applicants in the same proportion, but if there is oversubscription then the allotment is reduced. The process is done in proportion and each applicant is given a share in the same proportion in which he had applied.

This is what it means to have more subscribers

Suppose if the shares of a company have been applied for 4 times, then its IPO is distributed in the ratio of 4. 4 times means that 4 buyers are applying for one share. The Chairperson has said that the market regulator will never take its decision on the price discovery of IPO and will let it be decided as per the market demand and supply.

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