Under Subscription of Shares When the number of shares applied for, is less than the number of shares offered to the public, the shares are said to be under subscribed.

The number of shares for which applications were invited and the number of shares for which applications were received are exactly the same. However, in practice, these two figures will rarely coincide. The number of shares for which applications are received may be more or less than the number of shares for which applications are invited.

If the number of shares applied by the public is less, the issue is said to be under-subscribed, if more, then it is said to be over-subscribed; for example if a company invites applications for 10,000 shares and applications are received from public for 8,000 shares the issue is said to be under- subscribed and if they are for more than 10,000 shares, say 12,000 shares then the issue is said to be over-subscribed.

In the case of under-subscription, normally all the shares for which the public applies are allotted, as in case of full subscription.