IPO - Initial Public Offering

The lock-in period for IPO shares refers to a duration during which specific investors are restricted from selling their shares post-listing. This period varies based on the type of investor:

• Promoters: The lock-in period for promoters ranges from 6 months to 18 months, ensuring their commitment to the company's long-term growth
• Anchor Investors: Typically, anchor investors face a shorter lock-in period of 30 to 90 days, depending on regulatory norms and the specific IPO

IPOs can be volatile and may not perform as expected in the short term. Investors risk losing capital if the stock price drops after listing, especially if the company does not meet its growth projections.

Information on upcoming IPOs is often available through brokerage platforms, financial news sites, and regulatory bodies like SEBI, which publishes details on companies going public. You can also get these details under the upcoming IPO section on Bajaj Markets.

Eligibility for an IPO typically includes:

• Retail Investors: Individuals who invest in smaller amounts, usually under the “retail investor” category, with certain limits
• Qualified Institutional Buyers (QIBs): Entities like mutual funds, banks, and insurance companies, who invest large sums
• Non-Institutional Investors (NIIs): High-net-worth individuals or entities investing above the retail threshold

Investors must have a Demat and trading account to apply, and in some cases, certain financial or residency qualifications may apply depending on local regulations.

SME (Small and Medium Enterprise) IPOs generally carry higher risk but may provide significant growth potential. Investors should research the company’s stability, financials, and sector risks, as SME stocks can be more volatile compared to large-cap companies.

An IPO can be profitable if the listing price is higher than the issue price, but it also carries risks. Market demand, company performance, and sentiment determine returns, so profits are never guaranteed.

Companies launch IPOs to raise equity capital for expansion, debt repayment, or other corporate needs. It also increases public visibility and allows early investors to partially exit by selling their holdings.

In an IPO, a company offers its shares to the public for the first time through a regulated process. Investors apply within the subscription period, and allotment depends on demand and regulatory norms.

An IPO process involves preparation and regulatory filings, approval from market authorities, marketing the offer, subscription by investors, allotment of shares, and finally listing on the stock exchange for public trading.

When a company like Life Insurance Corporation (LIC) in India issued shares to the public for the first time in 2022, it was considered a public offering through an IPO.

The price band is the range within which investors can bid for shares during an IPO. The lower limit is the floor price, and the upper limit is the cap price.

Yes, a Demat account is essential to receive and hold shares allotted in an IPO. Without it, the company cannot credit the shares to your name in electronic form.

In an IPO, the issue size represents the overall value of all shares made available to investors. It is determined by multiplying the total number of shares offered with the set price per share.

Mainboard IPOs are for large companies meeting higher eligibility norms and list on main exchanges. SME IPOs are for smaller businesses and list on dedicated SME platforms with lower entry requirements.

In an IPO, the lot size specifies the smallest number of shares an investor can bid for in a single application. Investors must apply in multiples of this quantity, as determined by the issuing company.

The listing date is when the company’s shares start trading on the stock exchange. It usually occurs a few days after allotment, once all settlement processes are complete.

The open date is when the IPO subscription starts, and the close date is when applications end. Investors can apply only during this fixed subscription window.

The outcome of an IPO depends on factors like investor demand, market sentiment, and pricing. Some IPOs may list above the issue price, while others may list lower. As market conditions vary, IPO results are unpredictable and not guaranteed..

In a fixed price issue, the company sets a specific share price for investors to apply, without a bidding range. All applicants pay the same price per share.