valid as on 19/10/2020

Regulation 106 - Finalisation of basis of allotment
Effective from 26-08-2009

The executive director or managing director of the stock exchange, where the IDR are proposed to be listed, along with the post issue lead merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the allotment procedure as specified in .

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ICDR – SCHEDULE XV

Schedule XV
[See regulation 50 (2), 106 and Schedule XI]
ILLUSTRATION EXPLAINING PROCEDURE OF ALLOTMENT

A.
(1) Total no. of specified securities on offer@ Rs. 600 per share: 1 crore specified securities.

(2) Specified securities on offer for retail individual investors‘ category: 35 lakh specified
securities.

(3) The issue is over-subscribed 2.5 times whereas the retail individual investors‘ category is oversubscribed 4 times.

(4) Issuer decides to fix the minimum application / bid size as 20 specified securities (falling
within the range of Rs. 10,000 – 15,000). Application can be made for a minimum of 20 specified securities and in multiples thereof.

(5) Assume that 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 upto Rs.2,00,000.

(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 securities. C has applied for 120 specified securities. D has applied for 60 specified securities and E has applied for 20 specified securities.

(7) As per allotment procedure, the allotment to retail individual investors shall not be less than the minimum bid lot, subject to availability of shares, and the remaining available shares, if any, shall be allotted on a proportionate basis.

The actual entitlement shall be as follows:

Sr. No.Name of InvestorTotal Number of
specified securities applied for
Total number of specified securities eligible to be
allotted
1A32020 specified securities (i.e. the minimum bid lot) + 38 specified securities [{35,00,000 - (1,00,000 * 20)} /
{140,00,000 - (1,00,000 * 20)}] * 300 (i.e. 320-20)
2B22020 specified securities (i.e. the minimum bid lot) + 25 specified securities [{35,00,000 - (1,00,000 * 20) /
{140,00,000 - (1,00,000 * 20)}] * 200 (i.e. 220-20)
3C12020 specified securities (i.e. the minimum bid lot) + 13 specified securities [{35,00,000 - (1,00,000 * 20)} /
{(140,00,000 - (1,00,000 * 20)}] * 100 (i.e. 120-20)
4D6020 specified securities (i.e. the minimum bid lot) + 5 specified securities [{(35,00,000 - 1,00,000 * 20)} /
{(140,00,000 - (1,00,000 * 20)}] * 40 (i.e. 60-20)
5E2020 specified securities (i.e. the minimum bid lot)

B.
(1) Total no. of specified securities on offer @ Rs. 600 per share: 1 crore specified securities.

(2) Specified securities on offer for retail individual investors‘ category: 35 lakh specified
securities.

(3) The issue is over subscribed 7 times whereas the retail individual investors‘ category is over subscribed 9.37 times.

(4) Issuer decides to fix the minimum application / bid size as 20 specified securities (falling within the range of Rs. 10,000 – 15,000). Application can be made for a minimum of 20 specified securities and in multiples thereof.

(5) Assume that 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 upto Rs. 2,00,000, as per the table shown below.

(6) As per 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 retail individual investors is 35,00,000 and the minimum bid lot is 20 shares, the maximum no. of investors who can be allotted this minimum bid lot will be 1,75,000. In other words, 1,75,000 retail applicants will get the minimum bid lot and the remaining 25,000 retail applicants will not get allotment.

The details of allotment shall be as follows:

No. of LotsNo. of Shares at each lotNo. of retail Investors
applying at each lot
Total No. of Shares applied for at each lotNo. of investors who shall receive minimum bid-lot (to be selected
on lottery)
ABCD=(B*C)E
12010,0002,00,0008,750 =(1,75,000/2,00,000)*10,000
24010,0004,00,0008,750
36010,0006,00,0008,750
48010,0008,00,0008,750
510020,00020,00,00017,500
612020,00024,00,00017,500
714015,00021,00,00013,125
816020,00032,00,00017,500
918010,00018,00,0008,750
1020015,00030,00,00013,125
1122010,00022,00,0008,750
1224010,00024,00,0008,750
1326010,00026,00,0008,750
142805,00014,00,0004,375
1530015,00045,00,00013,125
1632010,00032,00,0008,750
Total2,00,000328,00,0001,75,000

Note: For the purpose of IDR, minimum application size shall be twenty thousand rupees.


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