IPO
Understanding IPOs
An Initial Public Offering (IPO) is when an unlisted company opens its doors to the public, allowing retail and institutional investors to buy its shares directly before they start trading on the stock exchange. It enables companies to raise capital for expansion while giving investors an early opportunity to become shareholders.
How do I apply for an IPO?
- Go to Menu > IPO to explore ongoing mainline and SME issues.
- Select your preferred IPO and enter the required lots, bid price, and UPI ID.
- Submit the bid and accept the mandate block notification on your UPI app to confirm.
- Track your bid progress and final allotment status anytime under IPO > Applications.
UPI Mandate & Fund Blocking
- Mandate Delays: Mandate approval notifications may take some time during peak hours or if an incorrect UPI ID was entered.
- How to Authorize: Open your UPI app (Google Pay, PhonePe, BHIM, etc.) and check under Pending Mandates / Autopay to approve the block request.
- Fund Release / Unblocking: Funds are only blocked in your bank account, not debited. If you do not receive an allotment, the blocked funds are released by the issuer's designated mandate expiry or listing date.
Investor Categories & Eligibility
- Application Categories: You can bid under Retail Individual Investor (RII), Employee, or Existing Shareholder categories, provided you meet the respective eligibility criteria.
- NRI Applications: Non-Resident Indians (NRIs) can apply via UPI using eligible NRE or NRO accounts, subject to their bank's UPI ASBA support.
Understanding ASBA & Depository Sync
- ASBA (Application Supported by Blocked Amount): Ensures your application money stays in your bank account earning interest until share allotment is finalized.
- UPI ASBA Support: Your bank must be an authorized SCSB (Self-Certified Syndicate Bank) enabled for UPI-based IPO applications.
- Share Delivery Post-Allotment: If allotted shares do not reflect immediately in your Firstock portfolio, it is typically due to standard processing and sync timelines between CDSL and Firstock. Allotted shares will credit to your demat account before the official listing day.
Important Rules & Processing
- Application Edits: Once submitted, an IPO application cannot be modified directly. You will need to cancel the existing bid and submit a fresh application within the issue window.
- Lot Sizes: Minimum bid quantities and lot multiples vary for each issue and are defined in the company’s official red herring prospectus (RHP).
- SME IPOs: You can apply for both Mainboard and SME (Small and Medium Enterprises) IPOs directly through Firstock.
- Role of RTA: The Registrar and Share Transfer Agent (such as Link Intime or KFintech) manages bid processing, final allotment finalization, and unblocking instructions.
FAQ
Companies may launch an IPO to raise capital for purposes such as business expansion, debt repayment, acquisitions, or other corporate needs.
Eligible investors can apply for an IPO through permitted channels. In India, IPOs may have categories such as Retail Individual Investors (RII), Qualified Institutional Buyers (QIBs), and Non-Institutional Investors (NIIs), depending on the issue.
The price band is the minimum and maximum price per share at which investors can bid during a book-built IPO.
The cut-off option allows eligible retail investors to indicate that they are willing to subscribe at the final price determined through the book-building process.
The lot size specifies the minimum number of shares that can be applied for in an IPO. Applications generally need to be made in multiples of the specified lot size.
IPO allotment is the process of determining how many shares each successful applicant receives after the IPO closes. If an issue is oversubscribed, investors may receive fewer shares than they applied for or none
If shares are not allotted, the amount blocked through the application process is generally released/unblocked according to the applicable process and timelines
An IPO is oversubscribed when the number of shares bid for exceeds the number of shares offered.
GMP is an unofficial market indication of an IPO's perceived premium or discount before listing. It is not an official exchange price and may not accurately predict the listing price.