Oversubscription is a situation where the:

The correct option is: number of shares applied for is more than the number of shares issued

Explanation:
When a public company decides to raise capital by issuing shares to the public, it invites applications through a prospectus. The company specifies the maximum number of shares it is offering (issued shares).
Oversubscription occurs when the public's interest in the company is very high, leading investors to apply for more shares than the company has offered for sale. In other words, the demand for the shares exceeds the supply. For example, if a company issues 100,000 shares but receives applications from the public for 150,000 shares, the issue is said to be oversubscribed by 50,000 shares.