The number of shares actually sold to a person who has applied to participate in a new issue. Where the shares of an initial public offer (IPO) are very popular and in great demand it may become “over-subscribed” – which means there are more buyers for the share than there are shares to allocate. If the issue is over-subscribed, the applicant may only be allocated a small proportion of his total application. The balance of his money is refunded. The company’s directors decide on exactly how the available shares will be allocated. Where an offer is over-subscribed, the directors also have the option of increasing the number of shares available to accommodate the additional demand. This happened at the IPO of Patrice Motsepe’s company ARC when it listed on the JSE. The issue was increased from R1,9bn to R2,2bn.

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