The Hindu Business Line : IPO allotments

It is a boom time for the stock market, especially for IPOs. In spite of high premiums charged by companies, retail investors are applying for the issues. But it is a pity that many have no clue about the fate of their applications. It appears there is no transparency in the allotment of shares.

A retail investor does not have access to the details of allotment. Earlier, companies used to publish the basis of allotments in leading newspapers; retail investors are now allotted shares based on the the lottery system. Many of my friends who applied for maximum lots were unable to get even a single share. This shows the lack of transparency.

If this trend continues, retail investors will find it difficult to get allotment and the only option for them would be to buy from the secondary market at a higher rate. The new entrants in the IPO segment should approach an independent body which is exclusively empowered to allot shares. And, retail investors should be given top priority in allotments.

Kalpana e-mail