Discover how initial public offerings (IPOs) transition from application to listing, with key milestones investors should track.
An IPO, or Initial Public Offering, marks the transition of a private company into a publicly traded one by offering its shares to the general public for the first time. This capital-raising move enables listing on a stock exchange and opens up the company to a wider investor base.
The IPO process starts with the company filing a DRHP with SEBI. This document contains critical details such as:
Company’s business model and operations
Financial statements and projections
Risk factors and use of IPO proceeds
Investors can access this document through SEBI’s website or the company’s investor relations page to conduct fundamental analysis.
Once approved, the IPO opens for subscription for 3 working days. Investors can apply through:
Online brokers (UPI-enabled)
Net banking platforms (ASBA route)
Mobile apps of registrars or stock exchanges
Applications must be made in predefined lot sizes, and each investor can place bids across one or more price points.
This is the phase where pricing is determined through market demand:
Investors bid within a given price band
Anchor investors (QIBs) typically participate a day prior to retail investors
Final price is decided based on demand, especially in the Qualified Institutional Buyer (QIB) segment
Oversubscription levels and price discovery play a crucial role in determining listing sentiment.
After subscription closes, allotment is processed as per SEBI guidelines (T+3 working days).
In oversubscribed issues, allotment is done via lottery or proportionate basis
Unallotted funds are released back to the investor within T+5 working days
Allotment status is communicated via SMS/email and can also be tracked on the registrar’s portal
The company announces a listing date, typically within a week after allotment.
Shares are credited to investor Demat accounts a day before listing
On the listing day, the stock is available for trading on NSE and BSE
Market sentiment and grey market activity often influence opening price action
DRHP Filing: Regulatory submission initiating IPO process
IPO Opening Date: Start of subscription window for investors
Allotment Date: When shares are allocated and refunds initiated
Listing Date: When shares begin trading on the stock exchange
Grey Market Premium (GMP): Indicates unofficial price expectation pre-listing
Subscription Levels: Strong QIB and retail interest can point to high demand
Anchor Book Participation: Institutional confidence often boosts investor sentiment
Assess Listing Gain: Compare listing price with the issue price to decide whether to book profits or hold
Align with Goals: Stay invested if the company aligns with long-term investment strategy
Watch Volatility: Initial days can be volatile—avoid emotional decisions based solely on listing day moves
The IPO listing process involves multiple steps, each offering signals that investors can use to fine-tune their decisions. From analysing the DRHP to watching subscription trends and anchor interest, being informed improves the chances of successful investing. Once listed, monitor price action with caution, and base your strategy on long-term fundamentals rather than short-term hype
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
The final issue price is set through the book-building process after the subscription window closes. It reflects investor demand, anchor investor interest, and market conditions at the time of pricing.
You can trade the stock from its listing date, which is usually 7–14 days after the subscription closes. Once the shares are credited to your Demat account, they become available for trading.
If no shares are allotted, your application amount is refunded within a few working days as per SEBI’s refund schedule. The funds are released automatically if ASBA was used.
Yes. In case of oversubscription, you may get fewer shares than applied for, or none at all, based on lot allocation and the category-wise allotment process.
Buying on listing day can be risky due to price volatility. Stocks may open significantly higher or lower than the issue price. It’s wise to wait until prices stabilise and fundamentals are clearer before investing.