Why Do Retail Investors Miss Out on IPO Allotment? | Bellarise IPO Explained

India’s equity market is witnessing a surge in interest in IPO allotments. The recent IPO of Pune-based auto parts company Bellarise Industries Limited generated massive enthusiasm among investors. This ₹2,150 crore public issue was oversubscribed by 43.14 times, reflecting skyrocketing demand. Yet, retail investors are once again left asking: “Despite applying, why don’t we get shares in IPO allotments?”

Let’s decode this scenario in simple terms and explore what the Bellarise IPO teaches retail investors.

Bellarise Industries IPO: Key Highlights

Bellarise Industries, a key supplier of safety-critical components and engineering solutions to major auto brands like Bajaj Auto, Tata Motors, Mahindra, and Jaguar Land Rover, offered 23.89 crore new equity shares in its IPO. The price band was ₹85-₹90, with a lot size of 166 shares, requiring a minimum investment of ₹14,940.

IPO Timeline:

• Issue Open: May 21, 2025
• Issue Close: May 23, 2025
• Anchor Investor Day: May 20, 2025
• IPO Allotment Date: May 26, 2025
• Listing Date: May 28, 2025 (on NSE and BSE)

Subscription Details:

• Overall: 43.14 times
• QIB (Qualified Institutional Buyers): 112.63 times
• NII (Non-Institutional Investors): 40.58 times
• Retail Investors: 4.52 times

Of the funds raised, ₹1,618.1 crore will be used to repay debt (total outstanding debt: ₹2,904.5 crore), with the rest allocated toward capacity expansion and general corporate purposes.

Grey Market Premium (GMP): Prior to listing, Bellarise shares were trading at a ₹28 premium, indicating an estimated listing price of ₹118, or a 31% premium.

IPO Allotment: Why Do Retail Investors Miss Out?

Despite regularly investing in IPOs, retail investors often return empty-handed. The Bellarise IPO is a textbook example. Here are the main reasons:

1. Sky-High Demand:
   The IPO received 43.14x subscription. For every 1 lakh shares on offer, demand surged to 43 lakh shares. Retail investors are only allocated 35% of the issue, which becomes negligible in such high demand.
2. Lottery System:
   In oversubscribed retail categories, IPO allotments are done via a computerized lottery. That means luck plays a big role, not just money.
3. Institutional Investor Dominance:
   QIBs (50%) and HNIs (15%) often apply with large sums. In Bellarise’s case, QIB and HNI subscriptions were 112.63x and 40.58x, respectively. This crowding reduces retail investor chances.
4. Application Errors:
   Mistakes like wrong PAN, incomplete KYC, insufficient funds, or incorrect Demat details can lead to application rejection.
5. GMP Hype:
   A high GMP of ₹13-₹28 drew even more investors, leading to heavier oversubscription and lower allotment chances.

IPO Market Heat in FY 2024-25

FY 2024-25 saw a bustling IPO market with several major issues grabbing investor attention:

• NTPC Green Energy: Mega IPO worth ₹10,000 crore
• Borana Weaves: 29.5x subscribed
• Swasthya Diagnostics, Hexaware Technologies, and Quadrant Future Tech also made waves

Yet, all of them shared one trend — retail allotment disappointment. Bellarise only reinforces this pattern.

How to Increase Your IPO Allotment Chances

Here are some simple ways to improve your odds:

1. Apply Early:
   Submit your application on Day 1, preferably in the morning. Bellarise had 71% subscription on Day 1, rising to 43.14x by Day 3.
2. Use ASBA or UPI:
   Apply through ASBA or UPI to ensure fast and secure processing. Make sure your account has sufficient funds.
3. Apply Through Multiple Demat Accounts:
   Use different family members’ Demat accounts, but only one application per PAN to avoid rejection.
4. Apply for Just 1 Lot:
   Priority is given to small investors applying for 1 lot. Larger applications do not increase allotment chances.
5. Verify KYC & Demat Info:
   Double-check your application details. Errors in KYC or Demat details often lead to rejections.
6. Target Less Crowded IPOs:
   If an IPO has lower subscription levels, chances of allotment are higher. But always do your homework on company fundamentals.

Why Was Bellarise So Popular?

The IPO’s strong appeal stemmed from solid fundamentals and growth prospects:

• Robust Client Base: Major auto players like Bajaj, Honda, Tata Motors, and Mahindra
• EV Focus: Increasing demand for electric vehicles aligns with Bellarise’s strategic priorities
• Financial Performance:
  • FY24 Revenue: ₹7,555.67 crore
  • FY24 Profit: ₹310.88 crore
  • For the 9 months ending Dec 2024: ₹245.5 crore profit (17.5% drop), but revenue grew by 0.9%
• Valuation: At ₹90 per share, the P/E ratio was 26x and Market Cap-to-Sales ratio stood at 1.07, placing it in the mid-range compared to peers.

Expert Opinions: Brokerages like Anand Rathi, Geojit Financial, and Bajaj Broking rated the IPO as a “Subscribe” for long-term investors.

Didn’t Get Allotment? Here’s What to Do:

If you missed out on Bellarise IPO shares, don’t lose heart. Consider these options:

• Buy Post-Listing: Bellarise listed at ₹100, an 11% premium. Consider entering after tracking its price movement.
• Watch Upcoming IPOs: Keep an eye on IPOs like Nikita Papers, Skoda Tubes, and Kanodia Cement.
• Think Long-Term: If you don’t get IPO allotments, invest in fundamentally strong listed companies.
• Seek Financial Advice: Consult a trusted broker or advisor for tailored investment strategies.

Disclaimer: Investing in the stock market carries risks. Consult a financial advisor before making any investment. This article is for informational purposes only and not investment advice.

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