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Related to oversubscribed: undersubscribed


A situation in which investors show so much interest in a new issue of a security that demand exceeds supply. Before a new issue, underwriters canvass potential investors, who may or may not book an order to buy a portion the new issue. If investors order more shares than there are shares being issued, the security is said to be oversubscribed. This may affect the price when the security is actually issued.


1. Or, relating to, or being a new security issue for which there are more requests to purchase securities than are securities available for sale. For example, brokers may take a sufficient number of preliminary orders for a new issue of stock for which there are insufficient shares available to satisfy the demand. Also called overbooked.
2. Of, relating to, or being a buyback or takeover attempt in which more securities are offered than the purchaser has agreed to buy. In such a case the purchaser may decide to buy the additional securities or may buy the agreed-upon number on a pro rata basis.


An initial public offering (IPO) is oversubscribed when investor demand for the shares is greater than the number of shares being issued.

What typically happens is that the share price climbs, sometimes dramatically, as trading begins in the secondary market, though the price may drop back closer to the offering price after a period of active trading.

The group of investment banks, known as a syndicate, that underwrites a hot IPO may have an agreement, known as a green shoe clause, with the issuing company to sell additional shares at the same offering price.

References in periodicals archive ?
The issue on Monday, January 4, was oversubscribed, while the average yield was substantively lower than the yield at the previous auction in November, when a total of EUR 100 mln were sold.
The remaining 40 per cent of shares were reserved for UAE investors and this part was 10 times oversubscribed.
The tranche of shares allocated to institutional investors was oversubscribed more than 30 times, while retail investors placed orders worth over 20 times the amount of shares available to them, Emaar said in a statement on Monday.
68 times oversubscribed with investors placing bids for a total of EUR 93.
According to Steppe Cement, the companyaACAOs additional share issue was 34% oversubscribed with some 83% of existing shareholders participating in the offer.
The cedi syndication was oversubscribed by 35% while the dollar syndication was oversubscribed by more than 90%," Ikpoki added.
oversubscribed districts), and which therefore allocated scarce SES spaces by giving priority to lower-achieving students among the eligible applicants.
Summary: JEDDAH: The General Authority of Civil Aviation (GACA) announced on Friday that its first ever sukuk offering was three times oversubscribed.
However, we have been asked to point out it is not oversubscribed.
5m in oversubscribed Series B financing(C)2011 M2 COMMUNICATIONS
5m, was nearly three times oversubscribed and the international tranche was more than five times oversubscribed - the share price jumping 62%.
International Resource News-January 21, 2011--African Eagle Resources PLC closes oversubscribed placing(C)1994-2011 ENPublishing - http://www.