Oversubscription happens when an IPO receives applications for more shares than the issue is offering. It is expressed as a multiple — '5x oversubscribed' means demand was five times the supply. Individual category subscription (Retail, NII, QIB) is also tracked separately.
Heavy oversubscription is generally read as a positive demand signal but introduces allotment lottery for retail applicants. A 50x oversubscribed retail category means only 1 in 50 retail bids will get allotted, regardless of how many lots were applied for. NII and QIB categories follow proportional allotment — every NII applicant typically gets some shares.
Oversubscription levels can vary dramatically by category. QIB 100x but retail 2x signals strong institutional demand and weak retail conviction. Retail 30x but QIB 1.5x signals retail FOMO without institutional validation. Reading the category-wise oversubscription is more useful than the headline overall number.