Upcoming IPOs: Several marquee listed companies are set to launch initial public offerings (IPOs) of their subsidiaries in the coming months. Besides unlocking value, these listings offer an added benefit to existing shareholders, who may be eligible to apply under the shareholder quota, improving their chances of securing IPO allotment.
Investors must know that even holding one share of the parent company is sufficient for eligibility in the shareholders’ quota. Apart from applying in the general retail or NII category, investors can also separately place bids in the shareholder quota, raising the possibility of securing allotment.
What is shareholder quota in an IPO?
The shareholder quota is a separate category available in certain IPOs. When a listed company’s subsidiary comes out with its share sale, a small portion of the issue is usually reserved for shareholders of the parent company, known as the shareholder quota.
This arrangement benefits both investors and the issuing company. Investors can improve their chances of IPO allotment by holding even a single share of the parent company. For the company launching the IPO, the shareholder quota helps attract wider participation and ensures stronger subscription to the issue.
Recent IPOs like Bajaj Housing Finance and Tata Technologies had shareholder quotas.
Upcoming IPOs with shareholder quota
Some of the upcoming IPOs with shareholder quota, according to market sources, would be Coal India subsidiaries. On Tuesday, Coal India said its board has granted in-principle approval for the listing of Mahanadi Coalfields Limited (MCL) and South Eastern Coalfields Limited (SECL), two wholly-owned subsidiaries of the firm.
Meanwhile, Dalal Street remains abuzz about the possibility of BCCL IPO in the early part of next year.
Media reports indicate that the BCCL IPO could be around ₹1,300 crore, translating into an estimated pre-listing valuation of nearly ₹13,000 crore. The issue will likely be an offer for sale, with Coal India expected to divest close to 10% of its holding in the subsidiary by selling roughly 46.57 crore equity shares.
Meanwhile, Hero FinCorp IPO, by its parent Hero MotoCorp, will be another offering expected to generate significant interest from investors. The IPO will likely include a fresh issue of ₹2,100 crore and an offer for sale (OFS) amounting to ₹1,568 crore from current shareholders, as per a Mint report.
Reliance Jio IPO, which is expected to hit Dalal Street in the first half of 2026, is also expected to include a shareholder quota. This spells good news for shareholders of Reliance Industries as the share sale is widely expected to be the biggest in the country’s capital markets’ history.
ICICI Securities expects Jio Platforms’ ensuing IPO to fetch “premium valuations”, as was the case in the high-profile equity raise of FY21, and has pegged the company’s equity value at $148 billion by September 2027.
Greaves Electric Mobility IPO has also secured Sebi nod for its IPO, which is a combination of a fresh issue of equity shares worth ₹1,000 crore and an OFS by the existing shareholders. Those who hold shares of Greaves Cotton will likely get the opportunity to apply to the shareholder quota of the upcoming Greaves Electric Mobility IPO.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
