Why was the OFS allotment not received even though the request was placed before the cut-off?

The Offer For Sale(OFS) allotment is decided by the exchanges and not the broker. The non-retail category’s bids are used to determine the cut-off price, and the allotted price may increase in response to increased demand for the OFS shares.

Bids from the non-retail category, which includes corporate organizations and those over ₹2 lakhs, are received on the first day of the OFS, and the cut-off price for allocation is decided based on these bids. The money is deducted and the shares are sent to the demat account on the following trading day, or T+1 day, if the OFS allotment is received.

Example Scenario

With a floor price of ₹100 for an OFS offering and a cut-off price of ₹110 determined by general bids, only retail bids of ₹110 or more are taken into consideration on the second day. In the event that 1500 shares are demanded by retailers and 1000 shares are set aside for retail allocation, the following situations regarding allocation could occur:

Mr A gets 400 shares at ₹110

Mr B gets 500 shares at ₹111

Mr C gets 600 shares at ₹112

The following scenarios for allocation may occur, contingent on the company’s chosen basis of allocation:

Price priority (multiple prices) basis: Under the price-priority technique, shares may be distributed to retail investors in one of two ways:Basis for pricing prioritization (many prices):Under the price-priority system, shares may be distributed to retail investors in one of two ways:

At the cut-off price, irrespective of the investor’s bid price, Mr B and Mr C get 600 shares and 400 shares each at ₹110. Mr A gets nothing.

At the investor’s bid price, Mr C gets 600 shares at ₹112. Mr B gets 400 shares at ₹111. Mr A gets nothing.

Proportionate basis at a single clearing price: Shares are distributed to retail investors on a proportionate basis at the cut-off price, with a single clearing price. At a ratio of 6:5:4, Mr. C, Mr. B, and Mr. A receive shares at Rs. 110. Put differently, Mr. B receives 333 shares, Mr. A receives 267 shares at ₹110, and Mr. C receives 400 shares.

Bids below the cut-off price are not taken into account in either of the allocation procedures, and the allotted price is lowered by any applicable retail category discount. The BSE circular contains further details on the allocation procedures for OFS issues.