EN 
EN
An Initial Public Offer (IPO) is a means of raising funds from the market. The investors who apply and get allotted shares of the IPO become shareholders (part owners) of the company. Here are some key FAQs pertaining to the IPOs
Also Read More About what is ipo?
The IPO full form is Initial Public Offering (IPO). As the name suggests, it means the company approaching the market to raise fresh funds or to list in the share markets.
Yes it is one and the same. It is Initial Public Offer in both the cases. You normal apply for IPO through the banker to the IPO whereas after listing the IPO is traded in the share market.
When the IPO hits the market, and opens for subscription it is referred to as the primary market. As the name suggests, primary market is the initial market. Once the IPO shares are listed then they will trade in the secondary markets.
Any adult who is competent to enter into a legal contract can apply for IPOs. It is necessary to have a demat account for investing in IPOs because nowadays all allotments are done only in demat form.
Technically, you do not require a trading account for applying to an IPO. Demat account (Demat account full form is a dematerialized account) alone will suffice. However, if you need to sell the shares post listing then you do require a trading account. Also, if you want to apply for the IPO online, then it is much easier to log in your application through your online trading account.
Fixed priced IPO is one in which the issue price is fixed. It is normally the par value plus a premium. In a book built issue, the price is discovered by bidding and the final price is decided based on the level where there is maximum demand. The issuer only defines a price range in case of a book built issue.
There are 2 things you need to understand here. You need to bid at a price that is within the range. All bids that are below the price range will be rejected. Suppose the range is Rs.430-460. If you have bid at Rs.450 and the final discovered price is Rs.460/- then your bid will be rejected. The easier option is to just bid at cut-off wherein you accept to take the IPO at whatever price is finally discovered
The company that is coming out with the IPO will decide the size of the issue based on how much funds it will require. The investment banker (BRLM) will advise the company on the ideal price range based on valuations and appetite from retail and institutional investors.
BRLM and registrar are different. Book running lead manager (BRLM) is the issue manager and will be responsible for the entire chain from setting the price to marketing the issue to doing road shows and also completing all the formalities with the exchanges and SEBI. The registrar maintains a record of shareholders, allots shares to them, looks after their corporate actions etc. Companies like Karvy and In-Time are examples of registrars.
Typically, the company will keep the IPO open for a period of 3-4 days to enable investors to apply in the IPO. All valid applications will have to be logged into the system before the close of trading on the last day.
The normal process is to finalize the basis of allotment and then allot the shares within a span of 10-12 days and then the company is listed on the stock exchanges. There is a popular ceremony called the “Ringing the Bell” ceremony which is done by the promoter of the company to declare the company ready for trading on the secondary markets.
There are 3 categories of investors in an IPO. The retail investors (who invest less than Rs.2 lakhs) are allotted in such a way that as many investors as possible get the bare minimum allotment so as too widen the equity base. The HNI category gets allotments on proportionate basis depending on the oversubscription. The institutional category gets shares allotted on a discretionary basis.
That is where ASBA (Applications Supported by Blocked Amounts) comes in handy for retail investors. The amount is only blocked in your designated bank account and you continue to earn interest. On the date of allotment, the account is debited only to the extent of the shares allotted to you and the block is removed on you account. So, there is no notional loss for you.
That is entirely market driven. A variety of factors will go into the listing price viz. valuations of the company, how it compares with peer group, profitability of the company, demand post listing, quality of anchor investors etc.
Never Miss IPO Investment
Join Our 2 Cr+ Happy Customers
Be a Part of IPO Success Stories!
Get the link to download the App
Trusted by over 2 Cr+ clients, Angel One is one of India’s leading retail full-service broking houses. We offer a wide range of innovative services, including online trading and investing, advisory, margin trading facility, algorithmic trading, smart orders, etc. Our Super App is a powerhouse of cutting-edge tools such as basket orders, GTT orders, SmartAPI, advanced charts and others that help you navigate capital markets like a pro.
COMPANY OVERVIEW KNOWLEDGE CENTER LEARN TO EARN BECOME A PARTNER MARKET OUTLOOK UPCOMING IPO CUSTOMER SUPPORT : OTHER LINKS :Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
"Prevent Unauthorised transactions in your Trading/Demat Account. Update your mobile numbers/email IDs with your stock brokers/Depository Participant. Receive alerts/information of your transaction/all debit and other important transactions in your Trading/ Demat Account directly from Exchange/CDSL at the end of the day. Issued in the interest of investors."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"We understand that certain investment advisors may be approaching members of the public including our clients, representing that they are our partners, or representing that their investment advice is based on our research. Please note that we have not engaged any third parties to render any investment advisory services on our behalf. We do not share our research reports or our clients’ personal or financial data with any third parties and have not authorized any such person to represent us in any manner. Persons making investments on the basis of such advice may lose all or a part of their investments along with the fee paid to such unscrupulous persons. Please be cautious about any phone call that you may receive from persons representing to be such investment advisors, or a part of research firm offering advice on securities. Do not make payments through e-mail links, WhatsApp or SMS. Please do not share your personal or financial information with any person without proper verification. Always trade through a registered broker."
"Issued in public interest by Angel One Limited, having its registered office at 601, 6th Floor, Ackruti Star, Central Road, MIDC, Andheri East, Mumbai - 400093, Telephone: +91 22 4000 3600, Fax: + 91 22 2835 8811."
Investments in securities market are subject to market risk, read all the related documents carefully before investing.
We collect, retain, and use your contact information for legitimate business purposes only, to contact you and to provide you information & latest updates regarding our products & services.
We do not sell or rent your contact information to third parties.
Please note that by submitting the above-mentioned details, you are authorizing us to Call/SMS you even though you may be registered under DND. We shall Call/SMS you for a period of 12 months.
Angel One Limited, Registered Office: 601, 6th Floor, Ackruti Star, Central Road, MIDC, Andheri East, Mumbai - 400093. Tel: 18001020. CIN: L67120MH1996PLC101709, SEBI Regn. No.: INZ000161534-BSE Cash/F&O/CD (Member ID: 612), NSE Cash/F&O/CD (Member ID: 12798), MSEI Cash/F&O/CD (Member ID: 10500), MCX Commodity Derivatives (Member ID: 12685) and NCDEX Commodity Derivatives (Member ID: 220), CDSL Regn. No.: IN-DP-384-2018, PMS Regn. No.: INP000001546, Research Analyst SEBI Regn. No.: INH000000164, Investment Adviser SEBI Regn. No.: INA000008172, AMFI Regn. No.: ARN-77404, (Date of initial Registration -03-12-2009, Current validity of ARN- 02-12-2026). PFRDA Registration No.19092018.Compliance officer: Mr. Bineet Jha, Tel: 18001020 Email: compliance@angelbroking.com . Only for National Pension Scheme (NPS) related grievances please mail to NPSgrievances@angelbroking.com Grievance Redressal Officer (GRO) - Mr Karan Dalal, Mo. No : 8655719858
For issues related to cyber attacks, call us at +91-8045070444 or email us at cybersecurityissues@angelbroking.com.
For any Law Enforcement Agency notices, please reach out / send notices to legal@angelbroking.com
Brokerage will not exceed the SEBI prescribed limit.
Copyright - All rights reserved
Never Miss IPO Investment
Join Our 2 Cr+ Happy Customers
Enjoy Free Equity Delivery for Lifetime
Open 100% free* demat & trading A/C now!
Minimal Brokerage Charges ₹0 brokerage on stock investments and flat ₹0 AMC for first year.
ARQ Prime Make smart decisions with ARQ prime, a rule based investment engine
Technology Enabled Trade or invest anywhere, anytime with our App or web platformsBy proceeding, I agree to T&C and Privacy Policy.
Do you already have an account? Login
