Cutoff Price

  • Definition: The price at which shares are allotted in an initial public offering (IPO) or a follow-on public offering (FPO) when the issue is oversubscribed. It is the highest price at which investors who applied for shares in the offering will be eligible to receive allocations. Investors who bid at or above the cutoff price will be allotted shares, while those who bid below it may receive partial or no allocation.
  • Alternate Term: Maximum Price, Allotment Price