Pro rata allotment of shares is a method of allocating shares to subscribers when the number of shares applied for is greater than the number of shares available for allocation. It ensures that each subscriber receives a fair share of the available shares. Pro rata essentially means "in proportion," which means a process where whatever is being allocated will be distributed in equal portions. If something is given out to people on a pro rata basis, it means assigning an amount to one person according to their share of the whole.

For example, if a company has 1,000 shares available for allocation and a subscriber applies for 100 shares, the subscriber will receive 10% of the available shares, or 100 shares, based on the full pro-rata allotment method. If the company uses the partial pro-rata allotment method, the allocation may be less than the number of shares applied for.

Pro rata allotment is often used when there is an oversubscription of shares, which means that the total number of shares requested is greater than the total number of shares available. The excess application money is adjusted towards the sum due on the shares allotted on a pro-rata basis.

In summary, pro rata allotment of shares means that shares are given in proportion to their value. It is a fair distribution of resources, where everything being allotted is split fairly.