FAQ

Frequently Asked Questions (FAQs) about Mainboard IPOs

What is an IPO?

An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time, allowing it to raise capital from public investors.

Who decides the price band in an IPO?

The price band of an IPO is decided by the company's lead managers (merchant bankers or syndicate members) in consultation with the company's management. The Securities and Exchange Board of India (SEBI) validates the content submitted via the IPO prospectus.

What is the role of an IPO Merchant Banker?

An IPO Merchant Banker is a financial institution responsible for managing the IPO process. Their duties include underwriting the IPO, ensuring compliance with regulatory requirements, advising on pricing and marketing strategies, and helping the company prepare the necessary documentation for the public offering.

What is the difference between Fresh Issue and Offer for Sale?

Fresh Issue: The company issues new shares to raise capital from investors. Offer for Sale: Existing shareholders sell their shares to the public without raising fresh capital.

How long does an IPO remain open for public subscription?

An IPO typically remains open for public subscription for 3-5 working days, depending on the company's decision and SEBI guidelines.

What is the role of the IPO Registrar?

The IPO registrar is responsible for managing the IPO process, including collecting applications, allocating shares, processing refunds for non-allotted investors, and transferring allotted shares to investors' Demat accounts.

Can I apply for an IPO without a PAN card?

No, having a valid PAN (Permanent Account Number) is mandatory for applying in an IPO.

What is the difference between Floor Price and Cut-Off Price?

Floor Price: The minimum price at which bids can be placed in a book-building IPO. Cut-Off Price: The final price at which shares are allocated to investors, determined after the bidding process is complete.

How do I apply for an IPO?

You can apply for an IPO through your broker or directly on the stock exchange's website. Ensure you have a Demat account and a valid PAN card.

What is the Market Lot Size for an IPO?

The Market Lot Size is the minimum number of shares that must be purchased in an IPO. It varies depending on the company and the category of investors.

What happens if I don't receive any shares in an IPO?

If you don't receive any shares, your application will be refunded to your bank account within a specified period.

Can I apply in multiple categories for an IPO?

Yes, you can apply in multiple categories (Retail Individual Investor, Non-Institutional Investor, Qualified Institutional Buyer) as long as you meet the eligibility criteria for each category.

What are the risks involved in investing in an IPO?

Investing in an IPO carries risks such as market volatility, lack of historical data on the company's performance, and the possibility of overvaluation.

Disclaimer

Information published should not be construed as investment advice. All information is for educational and knowledge purposes. High chances of typographical errors, however, due care has been taken to publish the data. Users are requested to visit and verify respective documents/data published on websites of SEBI, BSE, NSE, other exchanges from time to time.