How does IPO subscription work?

IPO subscription is calculated on real time basis by the exchanges (BSE and NSE) based on the bids received on their respective platforms during the IPO bidding session.

IPO subscription numbers are segregated into investor category-wise which shows the demand for an IPO by each investor category.

IPO subscription figures are calculated by dividing the total number of bids received in terms of the number of shares by the number of shares offered.

For example, a company offers 70,000 shares, of which 35,000 shares are offered to QIBs, 10,000 shares are offered to NIIs, and the remaining 25,000 shares are offered to RIIs.

The applications received against the above offer are 70,000 shares from QIB investors, 9,000 shares from NII and 30,000 shares from RII.

Thus, we can say that,

• IPO QIB subscription is 2x times. (70,000/35,000)
• IPO NII subscription is 0.9x times. (9,000/10,000)
• IPO RII subscription is 1.20x times. (30,000/25,000)

Overall, the IPO is said to be 1.55x times oversubscribed.