IPO - Initial Public Offerings

Share markets are of two types – primary markets and secondary markets. Primary markets involve the public investing in the latest upcoming IPOs. IPO (Initial Public Offering) is the process through which a previously completely private business opens up its shares to be traded in public on an exchange. When a company goes public, it hires investment banks to make sure that the IPO results in a high influx of capital from the public. The process involves significant efforts in due diligence, advertising, and regulatory compliance. The public buying the newly offered shares includes both retail and institutional investors, while those selling the shares include promoters and initial investors of the company.

Upcoming IPOs are IPOs of companies that have filed the DRHP (Draft Red Herring Prospectus) and are expected to open in the coming weeks or months.

It is important to be up to date about the latest IPOs in the stock market because you can then plan your IPO investment strategy properly based on your research on the companies as well as market sentiments regarding the IPOs. Even if you do not invest in an IPO right away, you can track the performance of upcoming IPOs. Tracking IPO performances will help you understand the sentiment in the market about IPOs and their sectors in general, add to your understanding of the capital markets as a whole and help you time your investments.

Applying for an IPO has become a simple online process. Most investors can complete their application through their stockbroker or bank.

• Step 1: Open a Demat and Trading Account — You need an active Demat account to hold shares electronically and a trading account with a registered broker.
• Step 2: Check the IPO Details — Review the company's prospectus, issue dates, price band, lot size, financial performance, and business risks before investing.
• Step 3: Submit Your Application — Log in to your broker's platform or use your bank's ASBA facility. Select the IPO, enter the number of lots you wish to apply for, and place your bid within the announced price band.
• Step 4: Approve the UPI Mandate or ASBA Request — If you apply using UPI, approve the payment request before the deadline. The application amount will remain blocked in your bank account until the IPO allotment process is completed.
• Step 5: Wait for Allotment — After the IPO closes, the registrar finalises the allotment. If shares are allotted, they are credited to your Demat account. If you do not receive an allotment, the blocked amount is released.

Investors are divided into three main categories:

• Qualified Institutional Buyers (QIB) — Mutual Funds, Domestic Financial Institutions (Banks, Financial Institutions and Insurance Companies), Foreign Institutional Investors and others.
• Non-Institutional Investors (NII) — Corporates, individuals other than retail investors and others.
• Retail Individual Investors (RII).

You can take the following steps to increase your chances of allocation:

• Apply from multiple Demat accounts (one application per PAN).
• If there is a price band, bid at the cut-off / highest price.
• Apply in time — before 4 PM on the final day.
• Approve the UPI mandate as soon as you receive it.

An IPO is a company's way to list on one or more stock exchanges and seek money from investors. Once the IPO lists, traders and investors can buy shares. The process involves a merchant banker who allots shares and refunds the money where applicable. IPOs may list at a premium (higher than the issue price) or at a discount (lower than the issue price).

Current IPOs are IPOs that are currently open for subscriptions.

An IPO is launched by a company to raise the money needed to run its business efficiently or reduce its debt. The issue may be a book building offering, where a price band is specified, or a fixed price offering, where the issue price is fixed. IPO investors have to wait until the listing date to sell the shares on the open market.

Apply from multiple demat accounts. If there is a price band, then try bidding at the highest price. Make sure you apply in time, i.e., before 4 PM of the final day. If the company going public has a parent company, then you can invest in the parent company, and your chances of allocation will increase.

An IPO is a company's way to list on one or more stock exchanges and seek money from investors. Once the IPO lists, traders and investors can buy shares. The process involves a merchant banker who allots shares and refunds the money where applicable. IPOs may list at a premium (higher than the issue price) or at a discount (lower than the issue price).

• Preparation: The company that intends to go public first determines that a Closed IPO is the right approach. They then identify and invite a limited group of investors who they believe can add strategic value to the company.
• Private Placement: The company issues shares to these selected investors in a private placement. This process occurs before the company's shares are available on public stock exchanges.
• Lock-Up Period: Investors in a Closed IPO often agree to a lock-up period, during which they cannot sell their shares on the public market. This helps stabilize the stock price during the initial trading period.
• Public Trading: After the lock-up period ends, the shares may become available for trading on public stock exchanges. At this point, retail investors can also participate in buying and selling the company's stock.