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TMI BlogIllustration explaining the procedure of allotment for retail individual investors [See regulation 47(3), 49(5), 145(5), 192(1)(a), 204(4), 267(3), 143(3) and 268(5)]X X X X Extracts X X X X X X X X Extracts X X X X ..... ategory: 35 lakh specified securities. (3) The issue is over-all subscribed by 2.5 times, whereas the retail individual investors category is oversubscribed 4 times. (4) The issuer has fixed the minimum application/bid size as 20 specified securities (falling within the range of ten thousand to fifteen thousand rupees) and in multiples thereof. (5) A total of one lakh retail individual investors have applied in the issue, in varying number of bid lots i.e. between 1 16 bid lots, based on the maximum application size of up to two lakh rupees. (6) Out of the one lakh investors, there are five retail individual investors A, B, C, D and E who have applied as follows: A has applied for 320 specified securities. B has applied for 220 specified se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue is overall subscribed by 7 times, whereas the retail individual investors category is over-subscribed 9.37 times. (4) The issuer has decided the minimum application/bid size as 20 specified securities (falling within the range of ten thousand to fifteen thousand rupees) and in multiples thereof. (5) A total of two lakh retail individual investors have applied in the issue, in varying number of bid lots i.e. between 1-16 bid lots, based on the maximum application size of up to two lakh rupees. (6) As per the allotment procedure, the allotment to retail individual investors shall not be less than the minimum bid lot, subject to availability of shares. (7) Since the total number of shares on offer to the retail individual investors is 35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total non-institutional investors category, (a) Reserved for applications above two lakhs rupees and up to ten lakhs rupees -i.e., five lakhs of specified securities (b) Balance for applications above ten lakhs rupees - ten lakhs specified securities (4) The issue is over-all subscribed by 2.5 times, whereas the non-institutional investors category mentioned in 3 (a) above is oversubscribed 4 times and 3(b) is oversubscribed 50 times. (5) The issuer has fixed the minimum lot size as 20 specified securities (falling within the range of ten thousand to fifteen thousand rupees) and in multiples thereof. (6) Therefore, the minimum application size for non-institutional investors is 340 specified securities (i.e. the application value should b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40)}] * 660 (i.e. 1,000- 340) 4 D 1,400 340 specified securities (i.e. the minimum lot of ₹ 2 Lakhs) + 191 specified securities [{5,00,000 - (500 * 340)} / {20,00,000 - (500 * 340)}] * 1,060 (i.e. 1,400- 340) 5 E 1,660 340 specified securities (i.e. the minimum lot of ₹ 2 Lakhs) + 238 specified securities[{5,00,000 - (500 * 340)} / {20,00,000 - (500 * 340)}] * 1,320 (i.e. 1,660- 340) NOTE: For category 3(b), calculation methodology shall be similar to above. Example B. (1) Total number of specified securities on offer @ ₹ 600 per share: 1 crore specified securities. (2) Specified securities on offer for non-institutional investors category: fifteen lakh specified securities. (3) Out of the total non-institutional investors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f non-institutional investors who can be allotted this minimum application size should be 1,471. In other words, 1,471 applicants shall get the minimum application size and the remaining 48,529 applicants will not get any allotment. The details of the allotment shall be as follows: No . of lots No . of shares at each lot No . of investors applying at each lot Total no . of shares applied for at each lot No . of investors who shall receive lots according to minimum application size ( to be selected by a lottery ) A B C D = ( B * C ) E 17 340 2,500 8,50,000 74= (1,471/50,000) *2,500 18 360 1,000 3,60,000 29 19 380 1,000 3,80,000 29 20 400 1,000 4,00,000 29 21 420 1,000 4,20,000 29 22 440 1,000 4,40,000 29 23 460 1,000 4,60,000 29 24 480 500 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions under category 3(b), calculation methodology shall be similar to above. ] Part B - Illustration explaining minimum application size For inviting applications in multiples of the minimum value as referred to in sub-regulation (2) of regulation 49, the procedure is clarified by following example: Assuming an issue is being made at a price of ₹ 900 per equity share. In this case, the issuer in consultation with the lead merchant banker can determine the minimum application lot within the range of 12 16 equity shares (in value terms between ₹ 10,000- ₹ 15,000), as explained hereunder: Options I II III IV V Lot Size @ ₹ 900/- per share 12 shares 13 shares 14 shares 15 shares 16 shares Application / Bid amount for 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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