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Winning rate in applying for IPO shares

Winning rate for IPO shares

The winning rate is like the winning rate of the lottery. Because the funds for new shares generally far exceed the funds planned to be raised by newly listed companies, shares need to be allocated among all the funds applied randomly to ensure the fairness of the purchase. The process is according to every 1000 shares(this amount could change according to IPOs) to apply for, so every 1000 shares will get an application number, and then there will be a draw number. If the investors' number is the same as the winning number, then the HKEx will allocate 1000 shares of the newly listed shares to the corresponding investor's account. Use the issuance (stock) / effective requisition (stock), the winning rate of the new stock issue will be obtained. The lower the winning rate, the less likely it is to win.

Winning rate = number of shares issued / number of valid requisitioners * 100%

For example, the issue price of new shares is $10, issuing 100 million shares. Then each requisition unit is $10 * 1000 = $10, 000, there can be a total of 100,000 successful requisition units. If the total amount of funds applied for is 10 billion, there will be a total of 1,000,000 valid requisitioners. The winning rate is 100,000 / 1,000,000 = 10%.

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