If the company issuing the IPO doesn’t oversubscribe their shares in RII Category than full allotment is done to all applicants. If the IPO is oversubscribed in RII category, the allotment to each retail investor will not be less than minimum Bid Lot, subject to the number of Equity Shares available in the Retail Portion.
For instance, if the IPO subscribed by the company is two times in retail, then one out of two applicants will get one lot irrespective of the number of shares they have applied for. Let’s assume, investor K applied for 15 lots for Rs 2 lakhs, investor L applied for one lot, and investor M applied for 7 lots in a public issue at cut-off price.
If the IPO which is subscribed 3 times in Retail Investor Individual Category, the allotment will be based on the lottery and only one out of three applicants will be getting one allocated lot irrespective to the number of shares they have applied. The Retail investors and non-institutional bidders are allowed to withdraw their bids until allotment.