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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
The analysts noted that the amount of the bids exceeding the Sh35 billion offer happened due to improved liquidity where the average interbank rate came down and the Treasury bill offers were also oversubscribed.
"The offering was multiple times oversubscribed on the qualified investor tranche.
Durham's most popular secondary was Esh C of E Primary school; St Cuthbert's Roman Catholic Voluntary Aided Primary School was the most oversubscribed in Sunderland; while Richardson Dees Primary School proved popular in North Tyneside.
The Iraqi Government team and Issue Managers Team held extensive road shows in London, Los Angeles, Boston and New York and the interest among international institutional investors was overwhelmingly positive where the issue was seven times oversubscribed.
The finance ministry has successfully raised e1/452.5 million, after a e1/410-million, six-year bond, issued for natural persons, was oversubscribed by more than five times.
New analysis reveals that almost half of secondary schools in England are oversubscribed, and the numbers are increasing.
New Delhi: With its offer for sale getting oversubscribed by an impressive 2.54 times, government raised Rs 640 crore through 10 percent stake sale in Engineers India Ltd (EIL).
The issue was oversubscribed by 151%, as the announced amount was 150 million.
Under current legislation, one in five oversubscribed schools can decide to only let in pupils who have been christened.
Dubai Parks and Resorts' Dh2.5 billion ($689 million) initial public offer was many times oversubscribed, the entertainment and leisure company, which is building a $2.9 billion amusement park complex in the emirate.
Offering oversubscribed at top of the proposed range of Dh2.90 per share