Finance folks, help me understand the IPO allocation probability
When the IPO for the retail category is over-subscribe let's say by 2x time, everyone seems to say that the probability of allocation is 1:2 i.e 50%, but is that the correct way of calculating probability? Different retail investors apply for different numbers of lots, maximum allottees = (shares offered / total shares in 1 lot), it is possible that number of applicants are less than maximum allottees if maximum applicants are applying for more than 1 lot, in such cases if IPO is 2x times subscribed by total applicants less than max allottees then everyone is 100% going to get at least 1 lot, so probability becomes 100% and not 50%. Is this calculation correct? What i'm missing or misunderstood? I have watched many videos and read many articles but i'm still not clear on how probability calculation should be done correctly.
Kiteretsuu
Stealth
10 months ago
himachal
Stealth
10 months ago
SmoothDeed82
Stealth
9 months ago