Under Subscription: Under Subscription occurs when the number of shares applied for by the public falls short of the total number of shares offered by the company. This scenario may prompt the issuer to reconsider pricing or other aspects of the offering.
Oversubscription: On the flip side, Oversubscription transpires when the demand for shares surpasses the total number of shares made available to the public. This enthusiastic response from investors signifies a strong market interest in the company’s offering, potentially leading to adjustments in the final pricing or allocation of shares.