We know it can feel disappointing when you apply for a certain amount in an IPO and receive less than expected.
Let’s break down why this happens and how the allocation process works on EasyEquities.
An IPO (Initial Public Offering) is when a company lists on the stock market for the first time and invites the public to become shareholders. Before this moment, ownership is usually limited to founders, early investors, and institutions.
During an IPO, the company decides:
- How much money they want to raise
- The number of shares they’ll issue to raise that amount
- An indicative price range for those shares
Think of it as one pie - no matter how many hungry investors arrive, the pie size stays the same.
Because sometimes demand is much bigger than supply.
Example:
If a company plans to raise R1 billion, but investors apply for R2 billion, the IPO is 2× oversubscribed. Everyone who applied gets roughly half of what they asked for - that's called pro-rata allocation.
It’s not personal - it’s math. The IPO was simply oversubscribed, and every investor gets a proportional slice.
Here’s the play-by-play:
- You apply through EasyEquities
- We submit all retail applications together
- The issuer decides how many shares each participating broker/platform receives
- We distribute our allocation fairly across all qualifying investors
We don’t hold shares back or play favourites - we just share the pie we’re given.
Allocation is decided by the issuing company and its IPO allocation committee, often advised by bookrunners and listing partners.
It’s not EasyEquities, the JSE, or a formula we invent.
Our role? To keep pushing for retail inclusion in spaces once reserved for institutions - and to make sure you’re always represented in the room.
IPOs often have a price range - say, R12 to R16 (for example).
We apply at the top end because applying lower can mean no allocation at all.
It’s not about timing or speculation - it’s about maximising your chance of being included.
This is similar to EasyProperties auctions - the most competitive price has the best chance of being filled.
- IPO supply is fixed - shares can’t be created on demand
- High demand = smaller individual allocations
- EasyEquities applies at the market price to maximise participation
- Allocation decisions come from the issuer