As per the latest General Information Document (Page 37) issued by SEBI in March 2020, the method for allotment for HNIs (referred to as NIIs) in case of an over-subscribed offer is as follows -
7.5 BASIS OF ALLOTMENT FOR QIBs (OTHER THAN ANCHOR INVESTORS), NIIs AND RESERVED CATEGORY IN CASE OF OVER-SUBSCRIBED OFFER
In the event of the Offer being over-subscribed, the Issuer may finalise the Basis of Allotment in consultation with the Designated Stock Exchange in accordance with the SEBI ICDR Regulations.
The allocation may be made in marketable lots, on a proportionate basis as explained below:
(a) Bidders may be categorized according to the number of Equity Shares applied for.
(b) The total number of Equity Shares to be Allotted to each category as a whole may be arrived at on a proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio.
(c) The number of Equity Shares to be Allotted to the successful Bidders may be arrived at on a proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio.
(d) In all Bids where the proportionate Allotment is less than the minimum Bid Lot decided per Bidder, the Allotment may be made as follows: the successful Bidders out of the total Bidders for a category may be determined by a draw of lots in a manner such that the total number of Equity Shares Allotted in that category is equal to the number of Equity Shares calculated in accordance with (b) above; and each successful Bidder may be Allotted a minimum of such Equity Shares equal to the minimum Bid Lot finalised by the Issuer.
(e) If the proportionate Allotment to a Bidder is a number that is more than the minimum Bid Lot but is not a multiple of one (which is the marketable lot), the decimal may be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 it may be rounded off to the lower whole number. Allotment to all Bidders in such categories may be arrived at after such rounding off.
(f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares Allotted to the Bidders in that category, the remaining Equity Shares available for allotment may be first adjusted against any other category, where the Allotted Equity Shares are not sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment may be added to the category comprising Bidders applying for minimum number of Equity Shares.
As mentioned in point (d), a draw of lots needs to be done where after proportionate Allotment, the number of shares per bidder is less than the minimum Bid Lot (in Shyam Metalics case that is 45 shares). As Non-Institutional Investors (aka HNIs and Corporates) category was subscribed 339.98 times (1514610270 shares) in Shyam Metalics IPO against only 4455000 shares being reserved for them. Hence, in terms of lots, HNIs had only 99,000 lots ( 4455000 / 45 ) reserved for them but applied for 3,36,58,006 lots ( 1514610270 / 45 ) in total. Likely due to such heavy oversubscription in the HNI category, a draw of lots would have been done to decide who gets allocated the shares.
Also, as per the “basis of allotment” document of other IPOs (like Indigo Paints), it is possible to see how allocation happens proportionately when over-subscription occurs in the HNI category (Table referenced below). The chances of allotment (refer to Ratio field in the table below) increases as the applicant’s IPO application amount increases -
B. Allotment to Non Institutional Investors (after Technical Rejections)
The Basis of Allotment to the Non-Institutional Investors, who have Bid at the Offer Price of Rs. 1,490 per Equity Share was finalized in consultation with BSE. This category has been subscribed to the extent of 261.6452 times. The total number of Equity Shares allotted in this category is 1,167,514 Equity Shares to 2,491 successful applicants. The category-wise details of the Basis of Allotment are as under. (Sample)
Sr. No. Category No. of Applications Received % of Total Total No, of Equity Shares Applied % to Total No. of Equity Shares Allotted per Applicant Ratio Total No, of Equity Shares Allotted 1 140 2276 28.28 318,640 0.10 10 5 : 93 1,220 2 150 605 7.52 90,750 0.03 10 7 : 121 350 3 200 561 6.97 112,200 0.04 10 1 : 13 430 4 250 110 1.37 27,500 0.01 10 1 : 10 110 5 300 210 2.61 63,000 0.02 10 12 : 105 240 6 330 181 2.25 59,730 0.02 10 23 : 181 230 7 400 117 1.45 46,800 0.02 10 6 : 39 180 8 500 184 2.29 92,000 0.03 10 35 : 184 350 9 600 64 0.80 38,400 0.01 10 15 : 64 150 10 670 146 1.81 97,820 0.03 10 37 : 146 370 11 700 71 0.88 49,700 0.02 10 19 : 71 190 12 1,000 211 2.62 211,000 0.07 10 81 : 211 810 13 1,100 17 0.21 18,700 0.01 10 7 : 17 70 14 1,340 48 0.60 64,320 0.02 10 25 : 48 250 15 1,500 27 0.34 40,500 0.01 10 16 : 27 160 16 1,670 33 0.41 55,110 0.02 10 7 : 11 210 17 2,000 54 0.67 108,000 0.04 10 41 : 54 410 18 2,350 10 0.12 23,500 0.01 10 9 : 10 90 19 2,500 16 0,20 40,000 0.01 10 1 : 1 160 20 2,680 13 0.16 34,840 0.01 10 1 : 1 130 21 3,000 30 0,37 90,000 0.03 11 1 : 1 330 22 3,350 37 0.46 123,950 0.04 13 1 : 1 481 23 3,400 10 0.12 34,000 0.01 13 1 : 1 130 24 4,000 18 0.22 72,000 0.02 15 1 : 1 270 25 5,000 19 0.24 95,000 0.03 19 1 : 1 361 26 6,000 11 0.14 66,000 0.02 23 1 : 1 253 27 6,710 68 0.84 456,280 0.15 25 1 : 1 1,700 28 10,000 22 0.27 220,000 0.07 38 1 : 1 836 29 13,420 29 0.36 389,180 0.13 51 1 : 1 1,479 30 16,770 10 0.12 167,700 0.05 64 1 : 1 640 31 20,130 30 0.37 603,900 0.20 77 1 : 1 2,310 32 26,840 17 0.21 456,280 0.15 103 1 : 1 1,751 33 33,550 14 0.17 469,700 0.15 128 1 : 1 1,792 34 67,110 25 0.31 1,677,750 0.55 256 1 : 1 6,400 35 100,670 10 0.12 1,006,700 0.33 385 1 : 1 3,850 36 201,340 10 0.12 2,013,400 0.66 770 1 : 1 7,700 37 335,570 109 1.35 36,577,130 11.97 1,282 1 : 1 139,738 38 671,140 28 0.35 18,791,920 6.15 2,565 1 : 1 71,820 39 1,340,000 11 0.14 14,740,000 4.83 5,121 1 : 1 56,331 40 2,348,990 11 0.14 25,838,890 8.46 8,978 1 : 1 98,758