IPO

An Initial Public Offering allows a company to offer its shares to the public for the first time. It is a process through which businesses raise capital by listing on the stock exchange. Investors can apply for shares offered in an IPO based on publicly available information and their individual understanding.

IPOs are generally offered in two main formats. Each format has its own structure in terms of pricing and bidding.

• Fixed Price Issue: In this format, the company announces a fixed price at which shares are offered to applicants.
• Book Building Issue: Here, the company offers a price range rather than a single fixed price.

Key Aspects of IPOs

Certain features help individuals understand how IPOs work and what information is available to them.

• Offer Document Availability : The company provides an offer document containing details such as business information, financial highlights, objectives of the issue, and associated risks.
• Defined Application Window : IPOs are open only for a specific number of days, during which applicants may submit their requests.
• Allotment Based on Availability: Share allotment is subject to the total number of applications received and the number of shares offered by the company.
• Listing on Stock Exchange: Once the IPO process is completed, the company's shares are listed on designated stock exchanges, enabling market-based price discovery.
• Multiple Application Categories: IPOs typically have different investor categories such as retail, non-institutional, and qualified institutional. Each category may have separate allocation rules as specified in the offer document.