Basic IPO FAQs

Why companies go for less than 7 days bidding (i.e. 3, 4 days generally), When maximum number of days for which IPO bid should remain open is 7 (and minimum is 3)?

Book-built IPOs have a minimum and maximum period of bidding that is 3-7 working days. This can be extended by 3 days if the price band is changed.

The majority of companies prefer 3 days. The following are some factors to consider when choosing minimum bidding days:

  • If a company needs to extend the bidding period, they can do so for three more days.
  • The IPO costs for Issuer Company can be reduced by shortening their bidding process (i.e.cost for advertisement campaign , extra staff cost etc). A shorter period of IPO reduces costs for registrars, lead managers, syndicate managers, stock exchanges and PR agencies, as well as other parties involved in the IPO process.
  • It reduces oversubscription and thus lowers the cost of processing applications.
  • A short bidding process can also result in early listing of IPO shares.

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 life cycle of an IPO?

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?