Institutional demand is often watched because those investors have research teams, though it is not a guarantee of performance.
Retail subscription directly affects your chance of allotment: the higher it is, the fewer applicants receive shares.
An easy example
A typical book-built mainboard issue reserves 50% for institutions, 15% for non-institutional investors and 35% for retail.
Important note
Category-wise subscription is published separately so you can see where demand is concentrated.
Common mistake
Reading total subscription only and missing that retail demand was weak or extremely strong.