Reviewed on 24 Oct 2026 · Source: IPO Bulletin explainer; checked against SEBI circulars on the T plus 3 IPO timeline and depository practice
Credit of shares is the step in which the shares you were allotted in an IPO are transferred electronically into your demat account. It happens after the allotment" data-term="basis-of-allotment" aria-describedby="ipob-def-basis-of-allotment">basis of allotment is approved. The registrar sends the details to the depositories, NSDL or CDSL, which credit the shares to the demat account mentioned in your application. You normally see the shares in your holdings on the evening of the allotment-finalisation day or the next morning, which is one working day before listing under the present three-day timetable. Along with the credit, the unblocking of unused money in your bank account is completed. The shares allotted are shown in your demat statement with the ISIN of the company, and you can sell them from the first trading day after listing. If shares are not credited within the expected time, the first thing to check is that the DP ID and client ID in your application were correct and that your PAN, bank and demat details match. Your broker’s app and the depository’s investor service will show the credit.
Example: An IPO closes on Monday, the basis of allotment is finalised on Tuesday, shares are credited to demat accounts on Wednesday evening, and the stock lists on Thursday. You can sell as soon as trading opens on Thursday.
The basis of allotment is the method and result by which shares are distributed among applicants after an IPO closes. It is finalised by the registrar to the issue in consultation with the stock exchange, and the exchange approves it before shares are credited. The document lists, for each category, how many applications were received, how many shares were applied for, the oversubscription ratio, and how many applicants received how many lots. Where a category is undersubscribed, every valid applicant gets the full quantity applied for. Where it is oversubscribed, shares are allotted proportionately in the QIB and NII categories, and by a computerised lottery in the retail category, so the minimum allotment is one lot. Because the basis shows exactly how many lots each applicant got, it is the best proof of how fair the process was. The basis of allotment is usually published on the registrar's website and the exchanges one working day after the issue closes, around the T plus 1 day. Investors can then check their status using their application number or PAN.
Credit of shares is the step in which the shares you were allotted in an IPO are transferred electronically into your demat account. It happens after the basis of allotment is approved. The registrar sends the details to the depositories, NSDL or CDSL, which credit the shares to the demat account mentioned in your application. You normally see the shares in your holdings on the evening of the allotment-finalisation day or the next morning, which is one working day before listing under the present three-day timetable. Along with the credit, the unblocking of unused money in your bank account is completed. The shares allotted are shown in your demat statement with the ISIN of the company, and you can sell them from the first trading day after listing. If shares are not credited within the expected time, the first thing to check is that the DP ID and client ID in your application were correct and that your PAN, bank and demat details match. Your broker's app and the depository's investor service will show the credit.
A demat account, short for dematerialised account, is an electronic account that holds your shares and other securities in digital form, much as a bank account holds money. It is opened with a depository participant, such as a broker or bank, and the securities are recorded with one of the two depositories in India, NSDL or CDSL. You need a demat account to apply for an IPO, because allotted shares are credited there. To open one you need your PAN, Aadhaar-based or other KYC documents, a bank account and a mobile number linked for verification, and the process is usually completed online. Each account has a Depository Participant ID and a client ID, which together identify it in IPO applications. Most investors also have a trading account linked to the demat account so they can buy and sell shares on the exchange. Demat accounts have charges such as annual maintenance and transaction fees, which vary between brokers. For safety, nominate a beneficiary, never share your login or OTP, and check your holdings statements regularly. Securities held in demat form cannot be lost, forged or damaged, unlike paper certificates.
Allotment is the step after an IPO closes in which the company decides who receives shares and how many. Once bidding ends, the registrar prepares the basis of allotment, which explains how the shares were shared between categories and applicants. If an issue is not oversubscribed in a category, most valid applicants get what they asked for. If it is oversubscribed, shares are rationed. In the retail category, successful applicants are chosen by a computerised lottery and each winner usually receives one lot, because the demand is far larger than the supply. Larger categories receive shares in proportion to their bids. After allotment, shares are credited to the demat accounts of successful applicants, and money for unsuccessful applications is released from the ASBA block. SEBI requires the whole process, from issue close to listing, to be completed within three working days. You can check your allotment status on the registrar's website using your application number, PAN or demat details, and on the exchange page for the issue.
Worked example
An IPO closes on Monday, the basis of allotment is finalised on Tuesday, shares are credited to demat accounts on Wednesday evening, and the stock lists on Thursday. You can sell as soon as trading opens on Thursday.
