Basic IPO FAQs

What are the life cycle of an IPO?

Here is the detailed process flow for a 100% Book Building Initial Public Offering IPO. This flow is intended to be easy to understand for retail IPO investors. These are the most common steps involved in an IPO's life cycle. The actual processing steps may vary and be more complex. For the most up-to-date information on IPO lifecycle in Indian Stock Market, please visit SEBI website, stock Exchange website or consult an expert.

  1. Initialization of an IPO by Issuer Company
    1. Assign a lead manager to the role of book runner.
    2. Designate a registrar for the issue
    3. Appoint members to a syndicate.
  2. Part 1 - Lead Manager's Pre Issue Role
    1. Draft an offer prospectus document to be submitted for an IPO.
    2. Send a draft of your offer prospectus to SEBI.
    3. Roadshows for the IPO
  3. SEBI - Prospectus Review
    1. SEBI reviews draft offer prospectus.
    2. If you need clarifications or changes, send it back to the Lead Manager (Step 2)
    3. The draft offer prospectus has been approved by SEBI. It is now known as Offer Prospectus.
  4. Lead Manager - Pre Issue Role - Part 2
    1. Send the Offer Prospectus to Stock Exchanges and the registrar of the issue. Get it approved.
    2. With the assistance of Issuer Company, determine the issue date and issue price range.
    3. Modify Offer Prospectus by adding date and price band. This document is now known as Red Herring Prospectus.
    4. Red Herring Prospectus & IPO Applications Forms are printed. They are then posted to the members of the syndicate. Investors receive them through this channel.
  5. Investors - Participate in the bidding process for the public offering
    1. Investors are invited to bid on the public issue
    2. Investors complete the application forms and place orders for the syndicate members. (The application form publishes the list of the syndicate members).
    3. Members of the Syndicate electronically submit bidding information to BSE/NSE. Bidding status is updated on BSE/NSE websites.
    4. All forms and checks must be physically filled out by members of the syndicate to the registrar.
    5. Investors can revise bidding by filling out a form and submitting it as Syndicate member.
    6. Members of the Syndicate keep updating stock exchange data with the most recent information.
    7. Investors are invited to bid on the Public Issue Closes
  6. Lead Manager - Price Fixing
    1. Lead managers will determine the final price of the issue based on the bids they receive.
    2. Lead managers make the Red Herring Prospectus with the final issue price, and then send it to SEBI or Stock Exchanges.
  7. Registrar - Processing IPO Applications
    1. All applications forms and cheques received from Syndicate members are sent to the Registrar.
    2. They provide applicant data and additional bidding information to computer systems.
    3. Send the cheques to clear.
    4. All bogus applications are listed.
    5. Finalize the pattern to allot shares based on valid bids.
    6. Prepare the 'Basis for Allotment.
    7. Transfer shares to the demat account for investors
    8. You can get the money back via ECS or Cheques.
  8. Lead manager - Stock Listing
    1. The lead manager and the stock exchange concludes Issue listing date after the allocated shares are shifted in investor's dp a/c.
    2. Finally, the stock market finally lists shares of the issuer company.

What do you mean by IPO?

By whom the 'Price Band' is decided?

'Date of issue' is decided by whom?

What a registrar of an IPO does?

What is role of Lead managers in IPO?

What does 'follow on Public offering' or FPO means?

What are Primary market & Secondary market?

How can you define the life cycle of an IPO prospectus?

what are the basic differences between Book building and fixed price issue

How is Floor price different from Cut-off price for a book - building issue

Differentiate between RII,NII,QIB, & Anchor Investor

Retail investor, I would like to invest more than Rs 1 lakhs in an IPO. What is the best way to invest in the Non-institutional bidders' category? What are the pros and cons of investing in this category?

Is PAN number mandatory for applying in an IPO?

IPO remains open for how many days?

After submitting the application in IPO,what details I should keep?

For an IPO,what is the 'Market lot size' & 'Minimum Order quantity'?

Will I get guaranteed amount of shares if applying for an IPO?

Is investing in IPOs less riskier than in direct stock market?

Can someone apply through more than one application in IPO with the same name?

In how many days does the issue open?