Understanding the Shareholder Category for IPO Applications
If you hold at least one share of the parent company in your demat account on the Relevant Handover Price (RHP) date, you are eligible for the shareholder category. This article will guide you through the process of applying for an Initial Public Offering (IPO) under the shareholder category and provide you with valuable insights and tips on how to increase your chances of success.
The Importance of Timing
Elegibility under the shareholder categoryis contingent on your shareholding status before the RHP date. For instance, if the company Ujjivan SFB is seeking an IPO, and the parent company is Ujjivan Financial Services (Ujjivan Ltd.), you must have held Ujjivan Ltd. shares before 23 November 2019, which is the RHP filing date. Individuals who purchased their shares after this date will be eligible for the regular retail or high-net-worth individual (HNI) categories.
What is the RHP Date?
The RHP date is a crucial timing factor in determining who is eligible for the shareholder quota. The RHP, or Relevant Handover Price, is the price at which the allotment of shares under the shareholder category is to be made. Shareholders who have held their shares prior to this date stand a better chance of being allotted shares under the shareholder quota.
High Allotment Chances for Shareholders
The chances of allotment through the shareholder quota can be quite favorable. For instance, as per recent data from various IPOs, the probability of getting at least one lot of shares through the shareholder category can be around 70-90 percent. These figures can vary based on the specific IPO and the total number of shares eligible for the shareholder category.
Blog and Social Media Resources
For more detailed and transparent information on how IPOs work, you can follow my blog at and visit me on Twitter @disciplinedtrder. These resources provide regular updates and insights into the latest IPO trends and strategies to maximize your chances of success.
Eligibility Categories: Retail vs. HNI
There are different categories for applying for an IPO. For the retail category, you must have an investment of less than 2 lakhs Indian Rupees (INR). For HNI category, the investment threshold is higher, requiring a minimum of 2 lakhs INR.
How to Apply for the Shareholder Category
To apply for the shareholder category, you need to buy at least one share of the parent company. You can check the IPO documents to see if other holding companies are included. If the documents state that any shareholder of the holding company is eligible, then you are eligible for the shareholder category.
When applying, make sure to select the "shareholder" option when prompted. This will ensure that you are submitting your application under the correct category.
Stay informed and stay ahead in the IPO game by keeping up with the latest developments. By following the right steps and making informed decisions, you can increase your chances of success in the shareholder category.