Get New IPO Listing Details in one Table. We Update the Latest Upcoming IPO of 2022 in India on daily basis from both NSE and BSE. We will also give an update about the Current Status of various DRHP filed IPOs. The following list includes both Mainboard and SME IPO of 2022 with important details. Click on the Company IPO link for getting more Details on IPO Price, Launch Date, Listing Date, Grey Market Premium (GMP), Subscription Status, Allotment Status, Review, and News, etc.
Upcoming IPO in India
|Upcoming IPO||Opening Date||Closing Date||Issue Size (₹ Cr)|
|OYO IPO||NA||NA||8,430.00 Cr|
|Ruchi Soya FPO||NA||NA||0.04 Cr|
|Adani Wilmar IPO||NA||NA||4500.00 Cr|
|Mobikwik IPO||NA||NA||1900.00 Cr|
|Gemini Edibles IPO||NA||NA||2500.00 Cr|
|Penna Cement IPO||NA||NA||1550 Cr|
|Skanray Technologies IPO||NA||NA||NA|
|HP Adhesives IPO||15 Dec 2021||17 Dec 2021|
|Euro Panel Products IPO||14 Dec 2021||16 Dec 2021||45.50 Cr|
|Data Patterns IPO||14 Dec 2021||16 Dec 2021|
|MedPlus IPO||13 Dec, 2021||15 Dec, 2021||1398.30 Cr|
|Foce India IPO||13 Dec 2021||17 Dec 2021|
|Nupur Recyclers IPO||13 Dec 2021||15 Dec 2021||34.20 Cr|
|Metro Brands IPO||10 Dec 2021||14 Dec 2021||1367.51 Cr|
|C.E. Info systems IPO||9 Dec 2021||13 Dec 2021||1039.61 Cr|
|Shriram Properties IPO||8 Dec 2021||10 Dec 2021||600.00 Cr|
|Rategain Travel Technologies IPO||7 Dec 2021||9 Dec 2021||1335.74 Cr|
|Anand Rathi IPO||2 Dec 2021||6 Dec 2021||660.00 Cr|
|Tega Industries IPO||1 Dec 2021||3 Dec 2021||619.23 Cr|
|Star Health IPO||30 Nov 2021||2 Dec 2021||7249.18 Cr|
|Go Fashion IPO||17 Nov 2021||22 Nov 2021||1013.61 Cr|
|Omnipotent Industries IPO||16 Nov 2021||22 Nov 2021||18.90 Cr|
|Tarsons Products IPO||15 Nov 2021||17 Nov 2021||1023.47 Cr|
|Latent View IPO||10 Nov 2021||12 Nov 2021||600.00 Cr|
|Sapphire Food IPO||9 Nov 2021||11 Nov 2021||2073.25 Cr|
|Paytm IPO||8 Nov, 2021||10 Nov, 2021||18300.00 Cr|
|PolicyBazaar IPO||1 Nov, 2021||3 Nov, 2021||5625.00 Cr|
|S.J.S. Enterprises IPO||1 Nov, 2021||3 Nov, 2021||800.00 Cr|
List of Forthcoming IPOs:
Following is the list of companies which has filed Draft Red Herring Prospectus (DRHP) with SEBI. Once SEBI gives a nod to them, we will update all relevant details.
|GPT Healthcare Limited||Oct 15, 2021|
|Radiant Cash Management Services Limited||Oct 13, 2021|
|Easing of Operational Procedure||Oct 13, 2021|
|BVG India Limited||Oct 01, 2021|
|Uma Exports Limited||Oct 01, 2021|
|Wellness Forever Medicare Limited||Oct 01, 2021|
|PKH Ventures Limited||Oct 01, 2021|
|Global Health Limited||Sep 30, 2021|
|Abans Holdings Limited||Sep 30, 2021|
|Sahajanand Medical Technologies Limited||Sep 29, 2021|
|Veeda Clinical Research Limited||Sep 29, 2021|
|Waaree Energies Limited||Sep 29, 2021|
|Lava International Limited||Sep 29, 2021|
Visit regularly for knowing various New Upcoming IPOs of 2022. We regularly update details about the Current Status of DRHP file IPOs.
What is an Initial Public Offering (IPO)?
An initial public offer is a procedure through which a private business is able to go public by selling its shares to people in general. This could happen to a newly founded or young company, or even an older company that decides to list its shares on an exchange, and thus becomes public. Businesses can raise capital through aid through an Upcoming IPO by releasing new shares to the public or existing shareholders could trade their stock to the general public without raising any new capital.
- An Initial public offering (IPO) is the procedure that offers shares from a privately owned business to the general public as an IPO of new stock.
- Upcoming IPOs give companies an opportunity to raise capital by selling shares on the main market.
- Investment banks are hired by companies to help market their products, assess demand, determine prices, determine the Upcoming IPO price and timeframe, and much more.
- An Upcoming IPO could be viewed as the best exit plan for business founders and early investors, gaining the full benefit of their investment in private equity.
Initial Public Offering (IPO) Explained:
How an Initial Public Offering (IPO) Works:
- Prior to an IPO, an organization is considered to be private. In the case of a private company that is not yet listed that has grown with a tiny number of shareholders, including early investors like founders, their families, and friends, as well as professionals such as angel investors or venture capitalists.
- An IPO is an important decision for a business because it grants the company the possibility of raising lots of capital. It gives the company a better chance to expand and grow. The improved transparency and share credibility on the stock exchange could help the company get more favorable terms when applying for borrowed money as well.
- IPO the shares in a business are priced by the process of underwriting due diligence. When an organization goes public the private share previously held ownership is converted to public ownership and the shares of private shareholders become valued at the price of public trading. Share underwriting could also comprise special rules that allow private shares to be converted to public ownership.
- In general, the transition from public to private is an important opportunity that private investors can make money and reap the rewards they were hoping for. Private investors can hold on to their shares in the public markets or sell a small portion of the entire amount in exchange for profit.
- The public market provides a fantastic possibility for investors from all over the world to purchase shares in the business and contribute capital to the shareholders of the company’s equity. The public is all investors, whether individuals or institutions who would like to invest in the business.
- In the end, the number of shares sold by the company and the cost of that shares are the primary factors that affect the company’s value of equity for shareholders. Shareholders’ equity is still the equity of investors’ shares when the company is public and private, however, in the case of an IPO the equity of shareholders is significantly higher when cash is used as the initial issue.
History of IPOs:
- The term “initial public offering (IPO) was an ephemeralization on Wall Street and among investors for several decades. The Dutch are believed to have conducted an original IPO through the sale of securities in the Dutch East India Company to the general public. Since then, IPOs have been used to allow companies to get capital from investors by issuing public shares.
- Over time, IPOs have been known for the ups and downs of the issuance. Certain sectors also have upwards and downwards in the issue due to innovations and other economic variables. Tech IPOs increased at the peak of the dot-com boom when startups with no revenue were eager to be listed on the stock exchange.
- Recently, the majority of the IPO hype has turned towards focusing on unicorns, which are companies with private valuations that exceed $1 billion. Media and investors heavily focus on the companies and their decision to go public through an IPO or remain secretive.
Key IPO Terms:
Like all aspects of investing, the initial public offerings come with their own language. It is important to know the following key IPO terms:
- A form of ownership in a publicly-traded company that usually entitles owners to vote on corporate matters and to receive company dividends. In the event of going public, a company will offer shares of its common stock to be sold. Issue Price: the cost at the point at which shares of common stock will be offered to investors prior to when an Upcoming IPO company starts trading on exchanges that are open to the public. This is commonly referred to as offering price.
- This is the most minimal amount of shares you could offer during an Upcoming IPO. If you are looking to purchase additional shares, then you have to make multiple bids in relation to the size of the lot.
IPO Draft Prospectus (DRHP):
- It is created by the lead manager and then submitted to SEBI to be approved for IPO. The document is a PDF and contains information such as the details about the business and the promoters and Upcoming IPO details and the risks. It can take a few months to obtain a DRHP approbation from SEBI.
IPO Red Herring Prospectus (RHP):
- It is an expanded edition of DRHP which includes more information on Upcoming IPO dates, prices, and the most recent financial information. RHP is also referred to by the name of IPO The Final Prospectus.
- The range of prices that investors are able to offer to purchase Upcoming IPO shares, as determined by the company and underwriter. It’s usually different for each type of investor. For instance, institutional buyers may be in a different price bracket as compared to retail investors. The underwriter is the investment bank that manages the offering of the company issuing it. The underwriter typically decides on the price of the issue and also announces the Upcoming IPO and distributes the shares of stock to shareholders.
Upcoming IPO Process:
- An IPO is a comprehensive offering that comprises two components. The initial phase is the pre-marketing of the offering. the second part is the actual publicly-traded offering. If a company is considering an IPO the company will make an announcement to underwriters through soliciting private bids. It may also issue an announcement to create interest.
- The underwriters manage this IPO procedure and have been selected from the business. The company can select one or more underwriters to handle different elements in the IPO process in a collaborative manner. Underwriters participate in all aspects of the IPO due diligence process, including document preparation, filing marketing, and issuance.
IPO Process Steps:
Step 1: Hiring Of An Underwriter Or Investment Bank
To begin the initial public offering the company will seek the assistance of financial experts such as investment banks. The underwriters will assure that the company about the amount being raised, and services acting as intermediaries between the business and the investors. They will also research the financial aspects of the company before signing an agreement for underwriting. The underwriting agreement is likely to include the following parts:
- The details on the agreement
- The amount to be raised
- The details of the securities being issued
Step 2: Registration For IPO
The Upcoming IPO process involves the preparation of a registration statement together with the proposed prospectus commonly referred to in the form of Red Herring Prospectus (RHP). The submission of RHP is required, in accordance with the Companies Act. The document contains all obligatory disclosures under the SEBI and Companies Act. Let’s take a look at the most important elements of RHP:
- Definitions This document contains the definitions of specific terms used in the industry.
- Risk factors: The section exposes the possible ways that risk can affect a company’s financials.
- Use of Proceeds: In this section, it explains the manner in which money received through investors’ contributions will be utilized.
- The Industry Description section describes how the company operates within the overall industrial sector. For instance, if a company is in IT, for instance, IT segment, this section will offer predictions and forecasts for the industry segment.
- The Business Description The following section is going to provide the essential business operations of the company.
- Management: This page contains information on key managers.
- The Financial Statement: This section includes financial statements as well as the audit report.
- Legal and other Information The section describes the litigation against the company, as well as other information.
This document must be provided to the registrar of corporations within three days prior to when the opening of the offer to bidders. The registration statement must conform to SEC regulations. After submission, the company is able to apply in the form of an IPO to SEBI.
Step 3: Verification by SEBI
SEBI, the market regulator SEBI checks the information provided of the business. Once the company’s application has been accepted then the company is able to set a date for its IPO.
Step 4: Making An Application To The Stock Exchange
The company is now required to submit an application for the exchange to allow floating its initial offering.
Step 5: Creating a Buzz By Roadshows
- Prior to when an Upcoming IPO is made public, the corporation tries to generate excitement on the market through traveling shows. In a span of two weeks, the CEO and employees of the company will promote the impending IPO all over the country. It is essentially an advertising and marketing tactic to attract investors.
- The most important aspects of the company are discussed with various individuals, such as fund managers and business analysts. The management team adopts different user-friendly strategies, including Q and A sessions and videos, group discussions virtual roadshows online, and many more.
Step 6: Pricing of IPO
- The company has the option of initiating pricing for upcoming IPO by either a fixed price IPO or through the Book Binding Offering. For Fixed-Price Offering the cost of the company’s stock will be announced prior to the IPO. In the case of a Book Binding Offering, a price range of 20% is set and investors are then able to make bids within the price range.
- To bid investors need to submit their bids according to the Lot price that the company has quoted which is the minimum quantity of shares that must be purchased. In addition, the company offers IPO Floor Price which is the lowest bid price as well as IPO Cap Price which is the highest bid price.
- The reservation period is usually between three and five working days, and investors have the possibility of revising their offers within a set period. After bids, the firm will decide on the Cut-Off price that will be the final cost at which the issue is sold.
Step 7: Allotment of Shares
When the upcoming IPO price has been determined the company and the underwriters will decide on the number of shares that will be allocated to every investor. In the event of an oversubscription, partial allocations are given. These IPO stocks are typically allocated to bidders within 10 days from the bidding date.
Advantages and Disadvantages of an IPO:
The main goal in An upcoming IPO can be the raising of funds for a company. It also has some advantages, however, it can also have drawbacks.
- One of the major benefits is that the company has access to the investment of the public at large in order to fund capital. This allows for easier acquisition transactions (share exchanges) and improves the exposure of the company, its reputation, and public image which could boost the profits and sales of the business.
- The transparency that is enhanced by regular quarterly reports can aid a business to obtain more favorable terms for credit borrowing as compared to a private firm.
- There are a variety of disadvantages in going public and one could opt for other strategies. The main negatives are that IPOs cost a lot of money and the expenses of running a public company are continuous and are usually not connected to other expenses of running a business.
- The fluctuation in the share price of a company can cause a distraction for management. They could be evaluated and compensated by the performance of stock instead of real financial performance. In addition, the business must disclose the financial, accounting, tax, and other information about its business.
- In these disclosures, the company could be required to reveal details about business practices and secrets that could aid competitors. The rigid leadership and management style of boards of directors may cause more difficulty to keep good managers who are willing to risk their careers. It is always an alternative. In lieu of going public businesses could also seek bids to buy out. In addition, there are other options for companies to consider.
- Can be used to raise additional funds in the future via second offerings
- Improves the retention and attraction of employees and managers with liquid equity participation (e.g. ESOPs)
- Upcoming IPOs can provide an organization an advantage in terms of price in the capital in debt and equity
- A significant amount of legal accounting, marketing, and legal cost arises and are often ongoing
- Time, effort, and the focus required of the management in reporting
- There is an erosion of control and more serious agency issues
Investing in an IPO:
- If a business decides to raise funds via an IPO it’s after careful thought and analysis that this specific exit strategy will increase the profits of early investors and will raise the most capital for the company. Thus, when the IPO decision is made and the company is able to make a decision, the chances of future growth are likely to be good, and a lot of public investors will be waiting to purchase certain shares for the very first time.
- In general, upcoming IPOs are priced to make sure that sales are made and make them more attractive, especially if they bring in a significant number of buyers from the initial issue.
- In the beginning, the cost for the upcoming IPO is typically determined by the underwriters in the process of pre-marketing. In essence, the IPO price is determined by the value of the company by using fundamental methods.
- The most popular method used is the discounted cash flow which is the actual value for the company’s anticipated to generate cash flow in the near future. Investors, underwriters, and other interested parties take a look at this price per share basis.
- Other approaches that can be used to determine the price include equity value enterprise value similar firm adjustments and many more. Underwriters are able to factor in the demand, but they typically reduce the price to guarantee success on IPO day.
- It isn’t easy to understand the basic principles and technical aspects of an IPO issue. Investors may be interested in news stories but the most reliable source for information is the prospectus, which will be accessible as soon as the company has filed the S-1 Registration.
- The prospectus offers lots of information. Investors should pay particular focus on the management team, and their remarks along with the expertise of the underwriters and details in the offer.
- The most successful IPOs will usually be backed by large investment banks that will promote the new issue efficiently. In general, the path toward the point of an upcoming IPO is a lengthy one.
- Therefore, investors who are seeking to invest can keep track of the latest headlines and other news in order to in determining the most effective and likely pricing for the offering. The pre-marketing procedure typically involves the demand of large accredited private investors and institutional investors that significantly influence the trading price of the upcoming IPO on its first day.
- Investors from the public market are not involved until the day of the closing offering. Investors of all kinds can participate, but individuals need to have access to trading available.
- The most commonly used method one can receive shares is to open an account with a brokerage company that has already received an allocation of shares and would like to share it with its customers.
Performance of an IPO:
- Many factors could influence the outcome of various factors that can affect the value of an IPO that is usually closely monitored by investors. Certain IPOs are overhyped by investment banks and could cause beginning losses.
- However, the majority of IPOs are known for their gains on the trading market in the short term after they are made available to the general public. There are several important factors to consider for IPO performance.
- If you take a look at charts of a number of IPOs and you’ll see that after a couple of months, the price of the stock goes into a dramatic downwards. It’s usually due to closing the lock-up time. If a company is going to the public market, its underwriters demand that official insiders of the company, such as executives as well as employees agree to a lock-up contract.
- The lock-up agreement is a legally binding agreement between the insiders and the underwriters of the business, preventing the sale of shares of stock for a certain period of time. The time frame can vary between three and 24 months.
- However, once locks expire, all insiders are allowed to sell their shares. There is a flurry of investors trying to sell their stocks in order to earn profits. This surplus supply can cause massive pressure on the price of the stock.
- Certain investment banks have waiting periods within their offer conditions. The bank reserves a certain amount of shares to be bought after a specified time.
- The price can rise in the event that this allocation is bought by the underwriters, and then lower if they are it is not.
- Flipping refers to the process of selling an IPO stock within the first few days in order to make an immediate profit. It’s commonplace in the event that the share is priced at a discount and rises the very debut day.
- A close cousin to an IPO is the time when an existing business spins off a section of its business as a separate entity, thereby making tracking stocks. The reasoning behind spin-offs as well as creating tracking stock is that, in certain circumstances, certain divisions of a business may be worth more than the whole.
- For instance, if one division is likely to grow quickly but has significant losses at present within the company that is otherwise growing slowly It could be beneficial to separate it and retain its parent as a significant shareholder, and then allow it to get additional capital through an IPO.
- From the standpoint of an investor, they can be intriguing IPO possibilities. A spin-off from an existing business offers investors plenty of information regarding the parent company as well as its ownership stake in the divesting business.
- The more information that is available to prospective investors is typically superior to less, so smart investors could find great opportunities from this situation. Spin-offs typically experience less volatility at first since investors are more aware.
IPOs Over the Long-Term:
They are known for their unpredictable opening day returns, which could attract investors hoping to take advantage of the discount that is offered. In the long run, the price of an upcoming IPO will eventually settle to a stable value that can be monitored by standard prices of stocks, such as moving averages. Investors who appreciate the IPO chance but don’t be willing to take on the personal risk of stock could consider managed funds that focus exclusively on IPO universes.
Frequently Asked Questions (FAQ):
We’ve compiled an inventory of the most commonly asked concerns regarding IPOs to aid you in understanding the application process more clearly.
Q. What Is the Purpose of an Initial Public Offering (IPO)?
- An upcoming IPO is basically an approach to raise money for large corporations, in which the company is able to sell their shares general public in the very first instance. After an IPO the shares of the company are traded on an exchange. The main reasons to conduct an IPO are to raise capital through the sale of the shares and supplying liquidity to the company’s founders as well as early investors and gain a more attractive valuation.
Q. Can Anybody Invest in an IPO?
- In most cases, there will be more demand than supply in an upcoming IPO. This is why it is not guaranteed that everyone who is interested in participating in an IPO is able to buy shares. People who are interested in participating in an IPO might be able to participate through their brokerage firm but having access to the IPO may be restricted to the larger clients of a company. Another alternative is to invest in an investment vehicle like a mutual fund or other investment vehicles that are focused on IPOs.
Q. Is it Good to Buy IPO Shares?
- In general, upcoming IPOs attract attention from the media however some of it is intentionally cultivated through the public listing of the company. The general consensus is that IPOs are highly regarded by investors since they typically cause volatility in price during the day that the IPO and within a short time. Sometimes, this can result in huge gains, however, it also can result in huge losses. In the end, investors must evaluate every IPO by the prospectus of the business that will be going public and also their financial situation and the risk tolerance.
Q. Difference Between Fixed Price Issue and Book Building Issue
- If a company decides to launch its Initial Public Offering (IPO) the company can choose to use one of the following ways:
- Method of fixed price
- Book building method
- A combination of the preceding two methods
Fixed price Method
- When a company declares an IPO the company determines the price at which it will offer shareholders shares. So, investors are aware of what the price will be of the shares before the company is listed. After the IPO is over, investors need to wait for the demand (and the value) of the stock.
- If a company is launching an issue at a fixed price investors are required to pay the entire amount of the shares they have applied for when they submit an application. If the amount of shares is not enough to cover the amount demanded, the extra money is returned to the investor.
Book building method
- In a book-building issue, the company doesn’t decide on a price, however, it offers a range of prices to investors. Therefore, investors are not aware of the cost at which shares will be allocated to them. They will be required to bid for the shares and the final price will be decided at the time that bidding is ended.
- A bid is when the buyer must specify the number of shares he wishes to bid on and the price he’s prepared to spend for each share (from the rates offered by the business). Once the bids have been registered the company will build its books and decide on the value of the shares.
Q. Difference between the Cut-Off Price and Floor Price in the Book Building Issue?
- In book building issues, the company is not able to determine the amount at which it will allocate the shares. Instead, it provides an investment price. Investors are able to make a bid at any time within the price range set by the business.
- The lowest price an investor is able to place an offer is called the Floor Price. In contrast, the most expensive price investors can make an offer is called the Cap Price in the IPO.
- If, for instance, the company is planning to launch an upcoming IPO with a price range between 350 and 400, then
- Floor Price = Rs.350
- Cap Price = Rs.400
- If the price of allotment is Rs.375 or more, then those who bid have a bid of Rs.375 and above will get the allotment. However, there’s another option for bidding on a book building issue called the Cut-off Price. In all practical terms, it is similar to bids on Cap Price. Cap Price since the investor is required to pay the maximum price (or Cap Price) while making the bid.
- Therefore, even if he does not specify the amount of bid it will be given an allotment for Rs.375 and then reimbursement of the remaining amount.
Comparing the Cut-off Price and Floor price
- Therefore, the floor price is the lowest price an investor is able to place an offer on an issue of book construction. In contrast, the cut-off price will be the amount at which the firm assigns shares, and the investor is obligated to purchase it at the stated price.
Q. Difference Between Anchor Invest, RII, NII, and QIB?
- When a company announces an upcoming IPO and it is a public offering, it comes with a variety of categories of investors are able to place their money:
- RII – Retail Individual Investor
- NII – Non-Institutional Investor
- QIB – Qualified Institutional Bidder
- Anchor Investor
RII – Retail Individual Investor
- The most popular type of investor bids for an IPO. This includes: Resident Indian individuals, as well as non-resident Indians (NRIs) as well as Hindu Undivided Family (HUFs)The maximum investment can be Rs.2 lakh Minimum of 35 percent from an IPO, will be reserved to the RII category. Investors in this class are able to buy at the cut-off rate
NII – Non-Institutional Investor
- If an investor has the right to bid in the RII category but wants to put in more than Rs.2 lakh, then the investor falls into this category. NII category. This category comprises: Resident Indian individuals and non-resident Indians (NRIs) Indians, Corporate corporations, trusts, bodies scientific institutions, Hindu Undivided Families (HUFs), as well as societies more than Rs.2 lakh can be invested by Investor Minimum 15 percent from this IPO will be reserved to the RII category. Investors in this class are not able to bid at the cut-off price
QIB – Qualified Institutional Bidder
- This category comprises: Commercial banks, public financial institutions, Mutual funds and foreign portfolio investors, etc.50 percent of the total offer is specifically reserved for this Category Investors in this class are not able to offer at the cut-off price
- This is a QIB that has applied for greater than Rs.10 crore for the book building issue.
- This includes: Hindu Undivided Families (HUFs), Resident Indian individuals, the Corporate trusts, Non-resident Indians (NRIs), corporations, scientific institutions, as well as societiesInvestors with over Rs.10 crore application investors from this category are not able to bid at the cut-off prices as much as 60 percent of QIB category is able to be allocated to this category.
Q. What is the meaning of “DP name” in the IPO online form?
- DP stands for Depository Participant in Initial Public offering formIn India there are two depositories in India that are National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). Each has members of the depository network that act as the connection between depositories as well as companies that issue securities.
- A DP could be a financial institution such as a bank, brokerage company, and so on. Registered by the Securities and Exchange Board of India (SEBI). A person who invests in the Demat account using the help of a DP. It is essential to specify the name and address of the DP as well as the DP ID should be stated in the application form.
Q. In order to apply to an IPO, do I need to get a PAN Number?
- It is indeed mandatory to have a PAN to submit an application in an upcoming IPO. Investors must double-check their PAN when they fill out the form because any mistake in the same could lead to the cancellation of the application.
Q. How Many Days Will an IPO Remain Open for the Public?
- Clause 8.8.1 specifies that the list of subscriptions for public issue subscriptions must be maintained open for a minimum of 3 working days. It is also not permitted to exceed 10 working days. In the event of book building issues, the IPO is open for a period of three up to 3-7 days. The time frame could be extended by three days in the event that the price band is changed.
Q. What are ‘Minimum Order Quantity’ and ‘Market Lot Size’ for an IPO?
- If a company is launching an IPO it will specify how many shares investors are able to apply to. This is referred to as the IPO bid lot size or market lot size or the minimum order amount. For instance, if an enterprise specifies its minimum order size of 100 shares, and the buyer wants to purchase more than 100 shares, the application could be submitted in multiples of 100 shares only. Thus, an investor could make an application for 100 shares 300 shares, 200 shares, etc.
Q. Can Applicants Apply for an IPO Through Multiple Applications on the Same Name?
- No. It is not possible to submit an application for an upcoming IPO by submitting multiple applications under identical names. If an investor attempts to do it, all applications filed in the same name are rejected. Another method is to apply under the names of several relatives. Be aware that the person applying must be able to access an account with a Demat account as well as a PAN.
Q. What is the Basis of Allocation or Basis of Allotment?
- A Registrar for an upcoming IPO releases a document to investors and stock exchanges with information on what the price will be at the end of IPO as well as bidding or demand information, as well as shares allocated. This document is known as the Basis of Allotment, or The Basis of Allocation. It is vital to note the fact that it is classified by the category of investors and the number of shares requested. Investors will get a comprehensive review of the upcoming IPO with details on the number of applications that are valid and the allocation information.
- One of the most important aspects in this report is the proportion of allotment, which tells investors if the IPO was oversubscribed and the number of times. This is crucial as investors can gauge the number of applicants who will be allotted shares from the total amount of applicants. For instance, if the allotment ratio to shares is 1:6, that means one of six applicants will get a share. Additionally, if the amount in this percentage is fixed each applicant will receive shares.
Q. What is the reason behind the Maximum Subscription Limit applicable to Retail Investors Limited to Rs 2 lakh?
- SEBI has categorized its investors under three general categories namely RIIs, QIBs, and NIIs. It also has mandated firms to allocate a certain percentage of their IPO for each category, as shown below:
- RII – Retail Individual Investor – 35% of the IPO
- NII – Non-Institutional Investor – 15% of the IPO
- QIB – Qualified Institutional Bidder – 50% of the IPO
- This was designed to ensure that all types of investors are able to be part of the initial public offering of an organization. Based on their research, SEBI decided to cap the amount of investment at Rs.2 lakh to allow an investor who is a retail investor. The advantage of being an investor who is a retail one is that SEBI regulates the method of allotment for this class and makes sure that the maximum amount of investors who are retail receive the allotment.
- However when it comes to NII the allotment is proportionate, and with regard to QIBs, it is the discretion of the investor. To ensure that shares are distributed to the most deprived the limit was set to Rs.2 lakh.
Q. What are the steps to withdraw From an IPO?
- It is necessary to log into the broker’s account where you submitted your application. Then, access your order books. Then, you must choose the appropriate IPO and then choose to withdraw. The blocked money will be released in a few days. It is crucial to note that you can withdraw your funds only in the period of bidding.
- If the IPO doesn’t have an option to withdraw online then you should make contact with the broker or bank through whom you submitted your application.
Q. How is the Cut-off Price of IPO Decided?
- The book running lead managers (BRLMs) and company determine the price at which to cut off the IPO after reviewing the book as well as analyzing the market’s reaction to this stock.
Q. What are the maximum IPO Applications that can be submitted using One Bank Account Using ASBA?
- According to SEBI, the investor is able to submit a maximum of five applications from a single bank account per issue by using ASBA.
Q. How Many Lots in an IPO Should I Apply to Get a Maximum Allocation in the Retail Category?
- It’s an individual decision for investors and there’s no absolute guideline to follow. Let’s take a look at two scenarios to consider:
- The IPO is being oversubscribed by the category of retail investors. In the event that an IPO is oversubscribed, SEBI requires the company to allocate at least one lot to each investor through an automated system based on the lottery to ensure that the majority of investors get the allocation in the event of oversubscription.
- The IPO is unsubscribed in the category of retail investors.
- In the event that an IPO is not being sold out, it’s a sign that there is not enough demand for the stock of the firm. Because the IPO is not fully subscribed it is likely that you will not receive the number of lots you’ve requested. However, the absence of demand could result in a decrease in price on a listing day. Therefore, applying for a single lot is a good idea in this case too.
- You may want to talk to an investment adviser to obtain more details.
Q. When will be IPO Shares credited to my Demat Account?
- Each company will have its own timeframes, you should be able to be credited the shares you applied for in an IPO within your Demat account prior to the day of the listing of the shares.
Q. Without having a trading account Do I have the ability to apply for an IPO through the ASBA Facility of My Bank?
- An account for trading is needed to purchase or sell securities on the secondary market. An IPO is conducted in the main market. Therefore, it isn’t necessary to have a trader account in order to apply for an IPO via the ASBA facility at your bank. But, you’ll need a Demat account in order to receive credit on the shares you have been allocated.
Q. How Different is an Anchor Investor From QIB?
First An Anchor Investor falls into the category of Qualified Institutional Buyer, or QIB. There are a few distinctions:
- Anchor Investor needs to apply for shares valued at greater than Rs.10 crore
- The bidding prices are different for anchor investors as well as QIBs.
- Out of the entire QIB allocation, up to 60% could be allocated to anchor investors.
- Anchor investors are not permitted to sell their share prior to 30 days following when they were allotted the shares in an IPO
- A key aspect of anchor investors is that, in the event that the cut-off price is less than the bid price, the difference amount isn’t paid back to the anchor investor. Because they invest more than Rs.10 crore the participation of anchor investors encourages smalled investors to invest.
Q. Can I Apply for an Initial Public Offering (IPO) Using the BHIM Application?
- It is true that SEBI is allowing the usage of UPI ID (that can be generated using the BHIM application) to fill out an IPO application. When you fill out your application, you will need to provide your UPI ID and then submit it. The broker will then send an order to block the money to the UPI app on mobile.
- It is necessary to sign in to the application and then approve the block order. The amount you requested will be blocked from your account at the banks. Post-allotment, the amount will be deducted (based on the amount allotted) and the remainder will be released.
Q. Can you sell the stock before the IPO is listed?
- You can’t sell shares before the upcoming IPO is listed on exchanges.
Q. Is a trading account necessary to apply for an IPO?
- A trading account allows the user to purchase and sell securities on the market. If you want to trade IPO shares or even regular stocks, you need an account for trading.
- The procedure for opening an account for trading is the same as applying to a normal savings account. Here’s an overview of the key steps:
Step 1: Choose the correct trading account for you.
Begin by shortlisting the top brokerage firms or stockbrokers. Check their rates for brokerage and also look for any discounts that are available. It is tempting to select the one with the lowest fees. However, you must prioritize the quality of service over price.
Select a broker that can respond to your trading requests quickly. If you are investing in IPOs they require you to be able to invest in a short time. If you don’t, you risk missing an opportunity to ride on an IPO boat.
Step 2: Submit your trading account application
Contact the brokerage or broker firm. They will send you an account opening application form and the Know-Your-Customer (KYC) form. Complete the forms using the correct information and submit documents of your identification and addresses.
Step 3: Verify the information.
The brokerage company or broker will call you to verify the information. This could be either in person or over the phone. You might be required to give specific information about yourself in order to complete the verification process.
After a short time, the broker will give you the information about your new account for trading. Now you are ready to start an initial IPO investment.
Q. Do you need a DEMAT account for investing in an IPO?
- The answer is that yes, you can invest in an upcoming IPO without having a Demat account.
- The long answer is slightly different.
- The need for an account with a Demat to make a bet on an IPO is contingent on two aspects:
- If you want to sell shares you purchase during an IPOIn theory, you don’t require a Demat account in order to participate in an IPO because you could apply for shares in physical form. However, the shares that are received can’t be traded on a stock exchange. They will remain tied to them until the time you change them to Demat form. The size of the issue IPO you intend to invest in the size of the issue is 10 crore or greater, it is required that investors have an account for Demat. You can establish a Demat bank account at either a brokerage firm or bank. Check if it’s an authorized agent for either of the two major deposits in the nation (NSDL as well as CDSL).
- Tips: If you go through an institution, you can obtain a trading account, Demat accounts, and a savings account.
Q. Why do most investors fail to get shares allotted in an IPO?
- The majority of IPOs have been oversubscribed. This means that the need for shares is greater than the number of shares that are available. In this situation, it’s not a surprise that many investors are unable to receive any shares allocated to them.
- This is the reason it is recommended to submit an application for IPO shares on the final day for bidding.
- So, you can be able to estimate the size of the subscription that will be. In that instance, you should only be able to bid for only one lot and not put their money in lock-up.
Q. Where to check IPO application and allotment status?
Traders and investors are usually curious and eager to find out the results as fast as they can. To reduce the anxiety and stress of the moment, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have created special pages and hyperlinks that investors can access.
- The NSE includes the IPO bid verification program. It is able to verification the IPO information uploaded to the exchange bidding system by your bank or member. The bid information that is uploaded by the member/bank should be available on the T+1 date (where T would be the date when bids were received on the NSE platform).
- Furthermore, the data will be available for six days following the issue end date. This gives the investor time to check the data and direct the member/bank to make any necessary changes should they be required.
- The exchange will also give allotment details as provided by the registrar of the issuer.
- Investors can take advantage of this service by registering with PAN information. After registering the investor will receive an email message from NSE at the email address that is registered. This email will include login information.
- The following link could be used to access the same: Check Here
- BSE has also come up with a similar platform.
- This unique feature lets investors check the status of their application that they have submitted to the Trading Member or SCSB (Self-Certified schedule Banks).
- Investors can view their application status or information on the site up to a week after the closing of the application.
- The following link may be utilized by investors: Check Here
Q. WHERE TO FIND THE IPO PROSPECTUS?
- Draft Red Herring Prospectus, Red Herring Prospectus, and Final Offer Document can all be found on SEBI’s website under Filings >
- Public Issue (Check Here).
- Draft RHP: Check Here
- RHP: Check Here
- Final Offer Document: Check Here
Q. Can I purchase IPO on margin?
- You might not have enough money for investing at the appropriate time. This is no longer a problem. Certain NBFCs will assist with financing this investment. This means that you can buy IPO with a margin except if you are an individual investor.
- It’s because retail investors aren’t given any assurance that they will receive shares after an IPO expires.
- However, the high net-worth people (HNIs) are assigned shares on a proportional basis in the event of an oversubscription. They are therefore assured of being allocated shares.
- This is the reason NBFC broking firms’ arms provide loans to HNIs to be used in the primary stock markets. This is known as IPO financing and IPO financing.
- The investor here has to pay a tiny margin, and the remainder is paid through the loan provider.
- It is up to the investor to apply for an IPO within the retail investor or HNI categories. Any investor applying for shares valued more than two lakh rupees is thought to be an HNI investor. If an investor is able to arrange for the upfront payment, he/she may apply for IPO financing.
- But remember that lenders may have specific requirements and requirements.
- Although IPO funding is increasing because of recent success with IPOs however, it is still an extremely risky and high reward scenario.
- It’s because if your issue is not a success to the extent you anticipated or is listed at a lower price than that IPO cost, then you could be liable for massive losses.
- Therefore, consider IPO financing only if you are aware of the valuation of the company and the potential risks.
Q. How are IPO investments taxed?
- The IPOs, in their own terms, don’t impose any tax implications. Taxes are only imposed the moment you choose to sell IPO shares.
- Any cash flow you earn when you sell the IPO shares is termed as capital gains..
- Tax on capital gains is assessed according to the length of time you owned the shares. If you held more than 12 months of the share, they are considered to be short-term capital gain, and if it’s more than 12 months, it’s called long-term capital gains.
- Tax on capital gains that are short-term is 15%. It’s 10% for equity gains that are made in the long term (over the course of 12 months). Be aware that you will be taxed when the equity gains exceed the amount of Rs. 1 lakh.
Q. What is an IPO price band?
- In a book-building issue, businesses that are planning to launch an IPO provide an IPO price of 20%, in which investors are able to offer shares. The price is finalized after bidding has been completed. This range of 20% is known as the IPO price range. Retail and institutional buyers are required to make their bids within the price band.
- There is no bid price that can be lower than the IPO floor price which is the lower boundary of the range. Also, it cannot be greater over what is the IPO caps price. This is which is the upper limit of the band.
- The auction is usually open for three days and bidders may alter their bids throughout the time the book is still open.
- Issuers favor book building issues over fixed price issues because they have an opportunity to find out the demand and price.
Q. What are various charges investors need to pay while applying for an IPO?
- It’s dependent. It’s based on a number of things like the value of a single share the number of shares you wish to purchase, premiums, and so on.
- Let’s assume that the face value of each share of the company that you’d like to buy is 40 rupees. Along with the price of the share the owners of the business would charge you a fee for the share (Let’s say, for example, Rs 10 in this example). The net value of each share is 50, also known as the issue price.