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In the midst of 2025's IPO mania, retail investors are aggressively seeking smarter strategies to increase their odds of securing IPO shares. One of these is using the shareholder quota — a priority reservation meant only for some investors. Everything you need to know about maximising is here: 

Certain IPO-bound firms provide a reserved component of their share sale to those who already possess shares in their parent or group firm. This is referred to as the shareholder quota. It usually constitutes 5–15 per cent of the total size of the IPO, providing existing shareholders with better opportunities of getting allotment than the general retail category.

For instance, if a financial division of a famous bank does an IPO and retains some shares for the parent company shareholders, having even one share of the parent company prior to a certain cut-off date might qualify you.

Eligibility is easy but time-bound. You need to be holding at least one share of the parent company prior to the filing of the Red Herring Prospectus (RHP). Purchasing on the date of filing or subsequently will not qualify.

Retail as well as high-net-worth individuals (HNIs) can apply in this quota. In certain cases, company employees might also be permitted to subscribe under separate quotas.

Certain firms even allow submitting applications under several categories — say, retail and shareholder — raising your chances of achieving at least a partial allocation.

With the market experiencing a record-high number of IPO approvals this year and investor participation reaching new heights, demand usually outweighs supply, particularly in the retail space. The shareholder quota provides a lower competition avenue — and that's where the benefit is.

A few IPOs waiting in the wings — Hero FinCorp, Greaves Electric Mobility, and Tata Capital — will offer shareholder reservations to investors with holdings in equities such as Hero MotoCorp, Greaves Cotton, or Tata Investment Corporation as of the record date.

While shareholder quota increases your chances of allocation, it should never be the only reason to buy a stock. Investors should assess the financial health, valuation, and long-term prospects of the parent company before making a purchase. Buying purely for IPO eligibility may not align with your broader portfolio goals.

With IPOs attracting record investor attention, using the shareholder quota can be an effective weapon for investors who want better chances at allocation. Just be sure to qualify in time — and buy with a plan, not simply for access.

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