10 Key Things To Know About IPO Stock Allocation

Key Things To Know About IPO Stock Allocation. Share investor thinking about various factors that determine IPO stock allocation.

(6) Personal Criteria Of Brokerage Firm

It is one of the most common things to determine share distribution in IPO process. Retail investors or traders usually apply for IPO issue through their respective brokerage house.

Each investor or trader who wants to participate in an IPO issue is evaluated & ranked depending on his/her assets & revenue generated for their firm.

Generally, individuals with significant & long term relationship tend to generate higher income for brokerage firm. Therefore, they receive higher priority than those with small assets or new relationships.

Thus, if you are not profitable for a brokerage firm, your probability to receive IPO shares decreases.

[Read Also: Best Stock Broker For Beginners: 16 Critical Factors To Consider]

(7) Overall Market Scenario Can Also Play A Significant Role

It is one of the most popular & key things to know about IPO stock allocation. Every IPO issue is quite different from one another. It can differ in terms of quantity of available shares, investor’s opinion, prevailing market conditions, quality of promoters & many more.

But, overall market conditions can play a major role in stock allocation. In bullish market conditions, you are less likely to receive shares. However, in bearish market conditions, you are more likely to receive shares.

Market sentiments can also play a major role in assigning the stock issue price. Thus, you should always have realistic expectations for your chances of receiving IPO allocation.

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