What is the allotment basis?
The allotment basis depends on the number of valid applications for subscription for the IPO shares. Normally, the share registrar appointed by the issuing company first screens out multiple, incomplete or wrongly filled applications, e.g. the application form is filled in Chinese, the applicant signs by way of a personal chop instead of a written signature, the number of shares applied for is in an amount other than those specified in the application form. Then, shares are allotted according to the basis of allocation as determined by the sponsor and the listed company.
If the IPO is oversubscribed, the allotment is generally made by way of balloting based on a predetermined basis. This means that you may receive a lower allocation than the number of shares you have applied for. You may also be allotted with more or fewer shares than others who have applied for the same number of shares. It is also possible that you are not allotted any shares at all.
Where do I find the allotment results?
You can find the determined offer price, allotment results and the basis of allocation for Main Board and GEM companies on the issuer's website and on the HKExnews website on the date as specified in the prospectus. Some may also publish advertisements in certain local newspapers though it is not mandatory. In some cases, detailed allocation results with each successful applicant's identification number may be available. To facilitate applicants to search the allotment results, they may be categorised based on the application method used, such as white forms, yellow forms submitted through CCASS Participants (e.g. a broker firm), yellow forms submitted by CCASS Investor Participants and electronic application instructions given to Hong Kong Securities Clearing Company Ltd. (HKSCC) (i.e. EIPO), if available.
If you use a white form or you are a CCASS Investor Participant, simply check your identification number against the list of successful applicants on the announcements and the total number of shares you are allotted. On the other hand, if your application is made through your intermediary (e.g. a broker firm or bank) by submitting a yellow form under its name or using the HKSCC's EIPO service, the allotment result is shown with the intermediary's identification number.
You may also enquire with the share registrar for the allotment results. The name of the responsible share registrar is available in the prospectus and on the websites of the HKEx or GEM.
Despatch of share certificates and refund cheques
The share registrar will distribute share certificates to successful white form applicants by ordinary mail usually on the day the allotment results are announced. You may only collect certificates of the new shares at the share registrar's office if your application is over a certain amount of shares, for instance, over 500,000 shares.
If you subscribe by a yellow form, the new shares will be deposited into your Investor Participant Account or your designated broker firm's account in CCASS. (Your broker firm will then credit your stock account.)
Refund cheques will be sent to successful applicants if the issue price is lower than the maximum offer price, as well as those who are only allotted part of the shares subscribed. Unsuccessful applicants will also receive the refund cheques by mail. The refund cheques will usually be sent in separate envelopes to lower concentrated mailing risk. Applicants may also make written requests to share registrars to collect the refund cheques in person or to have the cheques posted by registered mail.
As a protective measure, part of the Hong Kong Identity Card number (or passport number) of an individual applicant is printed on the refund cheque. For an application in joint names, the identity information of the first-named applicant is shown.
Previously, the identity number on an IPO refund cheque was printed in the way that the 5 th and 6 th digits (including alphabets and numerals) were masked by an asterisk "*". For example, the masked identity numbers might look like H123**6(7), HK12**56(7), P123**6789, etc. However, there were incidents where some IPO applicants, in submitting multiple applications, had attempted to circumvent the previous arrangement for masking identity numbers in the refund cheques.
To deter multiple applications, for IPO launched on or after 2 April 2007, the position of the two masked digits will vary from IPO to IPO, and will no longer be fixed at the 5th and 6th digits. The masked positions in each IPO will be randomly selected by a computer programme designed by the share registrar handling the IPO.
In case you do not receive your refund cheque, share certificates, or both, within 3 business days after the scheduled despatch date, contact the share registrar as soon as possible.
If you apply for new shares through your broker firm or bank, the allotted shares and refund money will be deposited directly to your stock account with the intermediary. Alternatively, if you apply through HKSCC's EIPO made available to its participants, successfully allotted shares will be credited directly into your Investor Account in CCASS.