Seeking a share in SME IPOs? Here's the allotment secret

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nation's GDP and approximately 45% to India’s total exports. With the government's pro-SME policies, including easier loans through the Mudra Scheme, tax benefits, and initiatives like ODOP & PLI scheme, the future looks even brighter. This presents accredited investors with an opportunity to make exponential gains by investing in SME companies.

Let’s take a look at how to secure allotment in SME IPOs. There are three ways through which an individual can apply for SME IPOs namely: Retail Investor: Direct investment in SME IPOs allows investors to participate in the early growth stages of small and medium-sized enterprises. By opening a demat account with a registered stockbroker or intermediary, investors can apply for shares during the IPO process.

Although this process suffers from a lack of access & a lack of liquidity, investors don’t get Quality shares in IPO through allotment, even though the minimum ticket size is ₹1,00,000/- only. Good IPOs get highly over-subscribed. For instance, take the example of Kay Cee Infra Limited which had allotted 9,82,000 shares for Retail Investors & got applications for 128,74,98,000 shares, showing a multiple of 1311x.

In other words, out of every 1311 Retail Investors, only 1 Retail Investor got an allotment. Take another example of Amcay products. While the issue size was ₹12.6 cr., the amount raised was close to ₹6,261 cr.

Out of this, the shares allotted to Retail Investors was 7,62,000 & applications bids stood at a whopping 74,15,30,000 which shows a 973x multiple. In other words, it means out of every 973 people, only 1 retail investor got an allotment. High Networth Individual: Similarly High Networth Individuals become prey to the lottery system of allotment in addition to