Is it safe to invest in an IPO with more than one bid?

Many new investors are uncertain about the safety of making several bids for the same IPO, mostly because they have received different opinions from various sources. The main reason behind this move is to boost the chances of allotment which is quite reasonable. But it is also very important to have a clear understanding of the rules regarding multiple applications, especially if you do not want to get your IPO application cancelled or rejected.

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The fundamental aspect that determines whether multiple bidding during an IPO is allowed or not is the method of submitting the bids. In case a single PAN is utilized to file multiple applications, all of them will be immediately rejected. The system treats such submissions as duplicates no matter how many accounts or payment methods are used. This rule is set to safeguard the fairness of the retail section in which one PAN is allowed to make a single valid application.

However, applying through different individuals, each with their own PAN, demat account, and bank details, is perfectly legitimate. Families often use this method if they all wish to participate. As long as every application is tied to a unique PAN, it is considered valid. This approach can increase the household’s overall chances of receiving at least one allotment without breaking any rules.

The risk connected with filing multiple ipo applications occurs only when a person attempts to utilize the same PAN number for different applications. Generally, during verification, all the applications associated with that particular PAN number are rejected. This not only reduces your chances of getting shares, but it also causes a delay in the release of money. Taking care of the details guarantees a smooth process.

In case your main objective is to increase the chances of getting allotment, then it is better and safer to concentrate on a single clear application rather than trying out multiple applications. However, one can still get a better chance by submitting the applications in various eligible categories (like in the case of retail or shareholder categories if they are available), but this is all based on the company’s composition.

In short, multiple bids are safe only when they follow the rules. Stick to separate PANs, and you won’t face any issues during the allotment process.