Overtegning

Overtegning is a term used in Danish-speaking financial markets to describe a situation in which the number of subscriptions for new shares exceeds the amount of shares being offered in a capital increase or public offering. The English equivalent is oversubscription. It typically occurs in IPOs, rights issues, or private placements when investor interest is high.

When an issue is oversubscribed, the issuer and its underwriters determine how to allocate the limited shares. Allocation methods vary, but common approaches include pro rata allocation (each subscriber receives a share of their request proportional to total demand), prioritizing certain investor groups such as existing shareholders or cornerstone institutions, or lottery-based allocation for retail applicants. In some markets a greenshoe option allows underwriters to issue additional shares if demand is strong, helping to reduce the impact of oversubscription.

Oversubscription is often interpreted as a sign of strong demand and can support the pricing and market reception of a new issue. However, it can also create perceptions of unfairness among investors if allocations are uneven. After the offering, allocation outcomes and investor demand can influence the stock’s early aftermarket behavior.