Introduction to IPO

An Initial Public Offering (IPO) is the process through which a private company offers its shares to the public for the first time. It allows businesses to raise capital, expand operations, and gain market visibility. Investors get an opportunity to participate early in a company’s growth by subscribing to its shares before stock market listing.

Chapters

1. IPO Basics

IPO Basics explain how a private company becomes publicly listed by offering shares to investors. It covers fundamental concepts such as issue types, benefits, risks, and how investors can participate in an IPO through stock exchanges for the first time.

2. IPO Eligibility

IPO Eligibility outlines the financial, legal, and regulatory requirements a company must fulfill before launching an IPO. These norms ensure transparency, investor protection, minimum profitability, capital adequacy, and compliance with SEBI and stock exchange regulations.

3. IPO Pricing

IPO Pricing determines the price at which shares are offered to investors. It may be fixed or decided through book building. Pricing depends on company valuation, market conditions, financial performance, demand, and future growth expectations.

4. IPO Process

The IPO Process describes the step-by-step journey from appointing intermediaries to stock exchange listing. It includes regulatory approvals, prospectus filing, pricing, subscription, allotment, refunds, and final listing of shares for public trading.

5. IPO Intermediaries

IPO Intermediaries are entities involved in managing and executing an IPO. These include merchant bankers, registrars, underwriters, legal advisors, and stock exchanges, each playing a critical role in ensuring smooth issuance and regulatory compliance.

6. IPO Investors

IPO Investors include retail investors, institutional investors, high net-worth individuals, and anchor investors. Each category has specific investment limits and allocation rules, allowing diverse participation while ensuring fair distribution of shares.

7. IPO Prospectus

An IPO Prospectus is a detailed legal document issued by the company. It provides information on business operations, financials, risks, promoters, objectives of the issue, and terms, helping investors make informed investment decisions.

8. Objects of the Issue in IPOs

Objects of the Issue explain how the company plans to use funds raised through the IPO. Common purposes include business expansion, debt repayment, working capital needs, acquisitions, and strengthening the company’s financial position.

9. IPO Valuation

IPO Valuation assesses the company’s worth before listing. It involves financial ratios, peer comparison, growth potential, earnings outlook, and market sentiment, helping investors evaluate whether the IPO is fairly priced.

10. IPO Application

IPO Application is the process by which investors apply for shares during the issue period. Applications can be submitted through brokers, banks, or online platforms by selecting quantity, price, and investor category.

11. ASBA IPO

ASBA (Application Supported by Blocked Amount) allows investors to apply for IPOs without paying upfront. The application amount remains blocked in the bank account and is deducted only if shares are allotted.

12. UPI IPO Application

UPI IPO Application enables retail investors to apply using UPI-enabled apps. Funds are blocked through UPI mandate approval, making the IPO application process faster, paperless, and more convenient for investors.

13. IPO Application Modification

IPO Application Modification allows investors to revise or cancel their IPO bids within the issue period. Changes can be made to price, quantity, or bid options before the IPO subscription window closes.

14. IPO Subscription

IPO Subscription shows investor demand for an IPO. It indicates how many times the issue is subscribed across retail, institutional, and HNI categories, helping investors gauge market interest and listing potential.

15. IPO Allotment

IPO Allotment is the process of distributing shares to applicants after issue closure. Shares are allotted based on subscription rules, category-wise allocation, and lottery system in case of oversubscription.

16. IPO Fund Unblocking

IPO Fund Unblocking refers to the release of blocked application funds for investors who do not receive allotment. The amount is automatically unblocked or refunded to the bank account after allotment finalization.

17. IPO Listing

IPO Listing is the first day when a company’s shares start trading on stock exchanges. The listing price may differ from the issue price based on market demand and investor sentiment.

18. IPO Grey Market

IPO Grey Market is an unofficial market where IPO shares are traded before listing. Grey Market Premium (GMP) reflects investor expectations but is not regulated and should be used cautiously.

19. Unlisted Shares

Unlisted Shares are shares of companies not listed on stock exchanges. These shares are traded privately and may offer early investment opportunities, but they carry higher risk, lower liquidity, and limited transparency.

20. IPO KPIs

IPO KPIs highlight key performance indicators such as EPS, ROE, P/E ratio, debt levels, and revenue growth. These metrics help investors analyze company fundamentals and compare IPOs before making investment decisions.

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