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FAQ
Common Questions
What is IPO & How does IPO Works in India?
IPO stands for Initial Public Offering. It is a process by which a private company raises funds by offering shares of its stock to the public for the first time. In India, a company must file a draft red herring prospectus with SEBI, set a price range, and allow investors to bid for shares. Once allotted, the stock begins trading on the exchange.
How accurate is the GMP data?
We source GMP (Grey Market Premium) data from multiple trusted market channels and update it frequently throughout the day. GMP data is indicative only and not a guarantee of listing price.
How & Who decides the Price Band in IPO?
The price band in an IPO is determined by the company and its investment bankers. The company's management, underwriters, and analysts assess the company's valuation, demand for the shares, and other market factors to arrive at the price band. The final decision is made by the company's board of directors.
What is the difference between IPO Cut-off Price & Floor Price?
The cut-off price in an IPO is the final price at which shares are allotted to investors, based on the demand and supply for the shares. The floor price is the minimum price at which shares can be offered. The cut-off price may be higher than the floor price if there is strong demand for the shares.
What is the difference between Fresh Issue & Offer for Sale?
Fresh issue refers to the issuance of new shares by a company through an IPO, resulting in an increase in the total number of outstanding shares. Offer for sale refers to the sale of existing shares by the company's current shareholders, allowing them to liquidate their holdings.
What is the role of the IPO Registrar?
The IPO Registrar is responsible for managing the share allotment process, refunding money to unsuccessful bidders, and maintaining the records of the shares allotted to investors in an IPO.
Who decided on the IPO Dates?
The IPO dates are typically decided by the company and its investment bankers, in consultation with the stock exchange and regulatory authorities.
What is the role of IPO Lead Managers?
IPO Lead Managers are investment banks appointed by the company to manage the IPO process. They assist in setting the IPO price, preparing the prospectus, marketing the shares, and managing the allotment process.
What is the Primary & Secondary Market?
The primary market is where companies issue new shares to raise capital, while the secondary market is where previously issued shares are traded among investors.
What is the IPO Prospectus Life Cycle?
When a company decides to go public, they file a draft red herring prospectus (DRHP) with SEBI, with the help of lead managers. SEBI reviews the DRHP and suggests changes if necessary. Once approved, the company adds issue size, date, and price band to create a Red Herring Prospectus (RHP).
What is DRHP?
DRHP stands for Draft Red Herring Prospectus. It is a preliminary document that a company files with SEBI before launching an IPO. It contains important information about the company, its business model, financials, risks associated with the issue, and other details that investors need to know.
What is RHP?
RHP stands for Red Herring Prospectus. It is a document that a company publishes after receiving regulatory approval from SEBI. It contains details of the IPO, such as the number of shares offered, issue price, and issue size, along with key financial information and risk factors.
Do you need a Demat Account to apply for an IPO?
Yes, investors need a Demat account to apply for an IPO, as the shares allotted in an IPO are credited directly to the investor's Demat account.
What is DP Name in IPO Online Form?
DP Name in an IPO online form refers to the name of the Depository Participant (DP) with whom the investor holds their Demat account. It is a mandatory field in the IPO application form.
Is PAN Card Mandatory to Apply for an IPO?
As per SEBI guidelines, a PAN (Permanent Account Number) card is mandatory for investors to apply for an IPO.
Can I apply for multiple IPO Applications on a Single PAN Card?
As per SEBI guidelines, an investor can apply for multiple IPO applications using a single PAN card, subject to the maximum limit per application.
How many IPO Applications can be made from One Bank Account?
As per SEBI guidelines, an investor can make multiple IPO applications using one bank account. However, the maximum limit per application should not be exceeded, and each application should be made separately. The bank account must be linked to their Demat account.
Is it possible to apply for an IPO via BHIM UPI?
Yes, investors can apply for an IPO using BHIM UPI as a payment option, as per the SEBI guidelines.
What is the difference between Book Building & Fixed Price?
In Book Building, the price range for the IPO is decided based on the demand generated from investors, while in Fixed Price, the price is determined by the company. Book Building provides flexibility and transparency, while Fixed Price offers simplicity and certainty to investors.
How many days does the IPO Open?
As per SEBI guidelines, an IPO must remain open for a minimum of three working days and a maximum of ten working days.
What is the Market Lot Size?
Market Lot Size refers to the minimum number of shares that an investor can bid for in an IPO. The size is determined by the company and is mentioned in the Red Herring Prospectus.
Is there any guarantee to get the IPO Application Success with Allotment?
No, there is no guarantee of IPO application success or allotment as the allotment process depends on various factors like oversubscription and demand.
What is the Basis of Allotment?
Basis of Allotment refers to the process by which shares are allocated to investors in an IPO. It is based on various factors, such as the number of shares available, applications received, investor category, and bid price. The basis of allotment is determined by the registrar of the IPO.
How many IPO Applications via one PAN Number?
Investors can apply for multiple IPO applications using one PAN number.