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Initial Public Offering (IPO)

What is an Initial Public Offering (IPO)?

When a private company offers its shares to the public for the very first time on the stock market.

01
An IPO is when equity shares of a company are offered to the public on the open market — the stock exchange — for the very first time.
02
The company going public raises capital and funds by trading IPO shares to meet its growth, expansion or debt-repayment goals.
03
During the IPO, a fraction of shares is reserved for different types of investors — Individual investors, Qualified Institutional Buyers (QIBs) and High Net-worth Individuals (HNIs).
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An IPO is structured as either a Fixed Price Issue — where the price is pre-determined — or a Book Built Issue — where investors bid within a price band.
05
A price band is the range within which investors can bid. The spread between the floor and cap cannot exceed 20%, and the band can be revised during the bidding period.
06
Once bidding closes, the final price — called the discovered price — is decided by the Issuer in consultation with Book Running Lead Managers (BRLMs) based on demand at various price levels.

Who Can Invest in an IPO?

IPO allocations are reserved across three distinct investor categories to ensure broad participation.

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Retail Individual Investors (RII)
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Qualified Institutional Buyers (QIB)
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High Net-worth Individuals (HNI / NII)
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Instruments offered: IPOs can be for Equity Shares, Non-Convertible Debentures (NCDs), and Bonds.
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Bid Lot: A pre-determined minimum number of shares that must be applied for by an investor. It is unique to each IPO and is mentioned in the application form.
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ASBA Facility: No need to issue cheques. Simply write your bank account number on the application form — funds are blocked, not debited, until allotment. Automatic refund if unallotted.

Features of IPO

Investing in an IPO with us is simple, paperless, and flexible — across all our platforms.

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Paperless Application

Apply for your desired IPO shares from the comfort of your home with just a demat account. No physical forms required.

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Attractive Pricing

Pick from IPO listings to take advantage of competitive prices offered by companies at the time of their public debut.

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Hassle-Free Refund

Get automatic refunds to your bank account in case of no allotment. ASBA facilitates only fund blocking — money never leaves your account until allotment.

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Multiple Modes to Apply

Apply through our online trading platforms, mobile app, Call 'N' Trade desk, or visit any of our branch offices.

Types of IPO

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Fixed Price Issue

The company and underwriters decide on a fixed price at which shares are offered to investors. Investors know the price upfront before subscribing. Demand is revealed only after the issue closes.

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Book Built Issue

Investors bid within a price band (floor to cap, max 20% spread). The final discovered price is determined after the bidding period closes, based on demand aggregated across all bids.

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SME IPO

Small and Medium Enterprises can list on the dedicated SME platforms of BSE (BSE SME) and NSE (NSE Emerge) with relaxed listing norms and lower issue sizes, providing growth capital to emerging businesses.

How Does an IPO Work?

From company decision to listing day — the key stages of an IPO journey.

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Company Decision
→
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DRHP Filing with SEBI
→
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Roadshow & Marketing
→
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Subscription / Bidding
→
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Price Discovery & Allotment
→
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Listing on Exchange
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DRHP (Draft Red Herring Prospectus): The company files detailed information about its financials, business model, risk factors, and use of IPO proceeds with SEBI for review before opening subscriptions.
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Bidding Period: Typically 3 working days. If the price band is revised, the period is extended for up to 3 more days (total not exceeding 13 days).
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Allotment & Listing: Shares are allotted to successful applicants. Refunds are processed via ASBA for unallotted applications. Shares are credited to demat accounts before listing on the exchange.

Past IPOs — Performance at a Glance

Quick look at recent IPO stock performance from listing day to latest price (2026).

Company Name Date of Listing Issue Price (₹) Listing Price (₹) LTP (₹) Returns from Issue Price
Autofurnish Ltd 29 May 2026 41 43 45.15 +10.12%
Q-Line Biotech Ltd 29 May 2026 343 452 474.60 +38.37%
Bio Medica Laboratories Ltd 29 May 2026 139 111.2 115.80 -16.69%
Vegorama Punjabi Angithi Ltd 27 May 2026 77 118.1 130.10 +68.96%
Teamtech Formwork Solutions Ltd 26 May 2026 63 75 72.10 +14.44%
NFP Sampoorna Foods Ltd 25 May 2026 55 54.5 44.50 -19.09%
Goldline Pharmaceutical Ltd 19 May 2026 43 59.75 48.44 +12.65%
RFBL Flexi Pack Ltd 19 May 2026 50 52.5 63.35 +26.70%
Recode Studios Ltd 12 May 2026 158 213.1 188.00 +18.99%
Onemi Technology Solutions Ltd 08 May 2026 171 191 272.46 +59.33%
Vivid Electromech Ltd 07 Apr 2026 555 565 945.65 +70.39%
Sedemac Mechatronics Ltd 11 Mar 2026 1352 1510 2144.90 +58.65%
Apsis Aerocom Ltd 18 Mar 2026 110 153 302.15 +174.68%
Innovision Ltd 23 Mar 2026 519 466 305.70 -41.10%
Shadowfax Technologies Ltd 28 Jan 2026 124 113 192.99 +55.64%

The securities quoted above are for illustrative purposes only and are not a recommendation. Past performance is not indicative of future returns.

Buyback & Offer for Sale (OFS)

Beyond IPOs, two other important corporate actions give investors liquidity and exit/entry opportunities.

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Buyback

A Buyback is a corporate action where a company repurchases its own shares from existing shareholders at a premium to the market price. It signals the company's confidence in its own business, returns surplus cash to shareholders, and can improve earnings per share (EPS) by reducing outstanding shares.

  • Boosts promoter confidence signal
  • Returns cash to shareholders
  • Usually offered at a price above CMP
  • Tax-efficient exit route for shareholders
📤
Offer for Sale (OFS)

An Offer for Sale (OFS) is a simpler method where promoters or large shareholders in publicly listed companies sell their existing shares directly through the stock exchange mechanism. OFS allows promoters to divest their stake without a fresh issue of shares.

  • No new shares are created — existing shares are sold
  • Helps promoters meet SEBI's minimum public shareholding norms
  • Retail investors get a discount on floor price
  • Quick 1–2 day settlement process

Frequently Asked Questions

Initial Public Offerings of the following financial instruments are offered:
  • Equity Shares
  • Non-Convertible Debentures (NCDs)
  • Bonds

The price band is the range of prices within which investors can bid during a Book Built IPO. The spread between the floor price and cap price cannot exceed 20%. If the price band is revised during the bidding period, the subscription window is extended by an additional 3 days, subject to the total period not exceeding 13 days.

A Bid-lot is the pre-determined minimum number of shares which investors must apply for. It differs for each IPO issue and is clearly mentioned in the application form. Investors can apply for one lot or multiples of the minimum lot size — for example, if the minimum bid lot is 10 shares, bids must be placed in multiples of 10.

Based on the demand received at various price levels within the price band, the Issuer Company — in consultation with the Book Running Lead Managers (BRLMs) — decides the final offer price. This final price arrived at through the bidding process is called the discovered price or cut-off price.

Yes, a demat account is mandatory to apply for an IPO in India. Allotted shares are credited directly to your demat account after the allotment process. You also need a linked bank account for ASBA-based fund blocking.

If you do not receive an allotment, the blocked funds in your bank account are released automatically through the ASBA mechanism — there is no manual refund process needed. Funds are unblocked within a few working days of the basis of allotment being finalised.

In a Fixed Price IPO, the company sets a specific price at which all investors apply. Demand is unknown until the issue closes. In a Book Built IPO, investors bid within a price band and the final price is discovered based on aggregate demand — providing a more market-driven price discovery mechanism.

Yes, retail individual investors can apply for IPOs using their UPI ID. After submitting the application through a broker or bank platform, a mandate request is sent to your UPI app (BHIM, Google Pay, PhonePe, etc.). You must accept the mandate within the specified time for your application to be considered valid. The amount remains blocked in your account and is debited only upon allotment.

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