Confirmation Allocation Note
Also written CAN · Confirmation of Allotment Notice · Confirmatory Allotment Note
The intimation an anchor investor or a fixed-price applicant receives confirming the shares allotted to them in a public issue — the allotment counterpart to a refund order.
In plain language
Once a public issue closes and the basis of allotment is approved, every successful applicant has to be told what they actually got. That intimation is the Confirmation Allocation Note, or CAN.
In a fixed price issue, an investor is sent a CAN, or a refund order, within the timelines the issue prescribes. In a book built issue, the registrar's post-issue work specifically requires sending the CAN to anchor investors, and an Allotment Advice to other successful bidders.
How it works
The registrar prepares the CAN as part of its post-issue responsibilities, alongside the rejection lists, the technical rejection list and the category-wise list of valid applications. It is one of the electronic records the registrar must keep accurately at all times, along with the particulars of allocation and allotment against valid bids.
The workbook does not give the CAN its own separate despatch deadline distinct from the listing timeline: shares must be credited to demat accounts and refunds or unblocking completed within 3 working days of the closure of the issue (T+3), and the CAN, refund order or Allotment Advice fits inside that same window.
A worked example
Sundara Textiles Ltd closes its IPO on a Wednesday (T day). An anchor investor, Bhavna Capital, had applied for Rs 12 crore worth of shares at the anchor price of Rs 340 and is allotted the full amount — 3,52,941 shares.
On T+1, the registrar finalises the basis of allotment. On T+2, it sends Bhavna Capital its Confirmation Allocation Note recording the 3,52,941 shares allotted at Rs 340. A retail applicant, Mr Iyer, who applied for 200 shares and was allotted only 100 because the issue was oversubscribed, receives an Allotment Advice for the 100 shares and an unblocking instruction to his bank for the balance application money. Trading in the shares begins on T+3.
Why NISM asks about it
Chapter 9, section 9.8 (fixed price issue), and Chapter 10, section 10.1 (post-issue work of the R&T agent), both mention the CAN. Expect a question on who receives a CAN (anchor investors, and fixed-price applicants generally) versus who receives an Allotment Advice.
Common exam traps
- The CAN is not the same as the Allotment Advice — the workbook uses CAN specifically for anchor investors in a book-built issue, and Allotment Advice for the wider set of successful bidders.
- A CAN confirms allotment; a refund order returns money. An applicant may receive either, or both, depending on whether the application was fully, partly or not allotted.
- The CAN sits inside the T+3 listing timeline, not on a separate clock.
Where this is taught
Free preparation for NISM Series II-ARelated terms
- Brokers to the issueStock exchange members appointed in a public issue to collect application forms and bids from investors, and paid a commission based on what they collect.
- Share Escrow AccountThe account a registrar opens for selling shareholders in an offer for sale, holding the shares to be sold before the issue opens — distinct from the cash escrow account for the public offer.
- T+3 listingThe requirement that shares from an IPO or FPO be listed and start trading within 3 working days of the issue closing (T+3) — reduced from an earlier T+6 by a SEBI circular of August 2023.
- Syndicate memberA SEBI-registered intermediary permitted to accept bids and applications in a public issue and to act as an underwriter for it — the regulatory role behind the general term "broker to the issue".
- IPO gradingThe requirement that an unlisted company's IPO be graded by an approved credit rating agency before the issue — a pre-issue checklist item the workbook states without specifying a grading scale.