Glossary

Draw of Lots

Draw of Lots is the computerized lottery SEBI requires when an IPO category is oversubscribed, giving each valid application an equal chance at allotment regardless of application size.

What It Means

Draw of Lots is the computerized lottery exchanges run to allot IPO shares when a category is oversubscribed. Every valid application gets one entry into the draw, and the computer picks winners at random until the available shares run out. Everyone else gets zero.

Example

Say a category has enough shares for only 3,000 successful applicants, but 30,000 people applied. Only 1 in 10 applications gets picked. It doesn't matter whether you applied on day one or the last hour, or whether your broker is Zerodha, Groww, or anyone else. The draw treats every valid application identically.

Warning

Applying for more lots than the minimum doesn't improve your odds in most retail draws. Each application typically gets one entry regardless of size, so bidding bigger just risks more money without buying a better chance.

Draw of Lots in IPO Allotment Explained | TraderStack