IPO FAQs: Your Burning Questions Answered
Got questions about IPOs? You’re not alone—investors of all kinds are curious about how these work in India.
We’ve rounded up the most common ones to give you a straight scoop on the basics, no fluff.
Miss something? Shoot us an email at ipowatchinfo@gmail.com, and we’ll add it quick!
IPO Basics Unpacked
What’s an IPO & How Does It Roll in India?
An IPO—Initial Public Offering—is when a private company goes public, selling shares to folks like us.
They file a draft (DRHP) with SEBI, get the nod, then drop the final docs (RHP) with dates and details.
It’s either new shares for cash (Fresh Issue) or existing owners selling off (Offer for Sale)—all to list on exchanges like NSE or BSE.
Who Sets the Price Band?
Lead managers—fancy merchant bankers—pick the price or range, then SEBI signs off on the prospectus.
Cut-Off Price vs. Floor Price?
In a book-building IPO, the Floor Price is the lowest bid (say ₹90 in a ₹90-100 band), while Cut-Off is what you’re cool with paying—up to the max (₹100) or whatever the company locks in (like ₹95).
Fresh Issue vs. Offer for Sale?
Fresh Issue means new shares, new money for the company. Offer for Sale? Promoters cash out their old shares—no extra funds raised.
Who Picks IPO Dates?
The company hashes it out with lead managers post-DRHP approval—team effort!
What’s an IPO Registrar Do?
These SEBI-registered pros (like Link Intime) handle the grunt work—collecting applications, allotting shares per SEBI rules, refunding the unlucky, and popping shares into Demat accounts.
And Lead Managers?
They’re the brains—drafting the prospectus, getting SEBI’s okay, setting prices and dates, and guiding the company to the market. Big IPOs might have a squad of ‘em.
Primary vs. Secondary Market?
Primary’s where you buy straight from the IPO. Secondary’s the trading floor—NSE, BSE—where listed shares swap hands after launch.
What’s the IPO Prospectus Life Cycle?
Starts with the DRHP—company details, risks, finances—filed with SEBI via lead managers.
SEBI tweaks it, approves it, then it’s the Offer Document.
Add size, dates, and price band, and it’s the RHP—check both on SEBI’s site under Public Issues.
DRHP vs. RHP?
DRHP’s the draft—raw info for SEBI review. RHP’s the final cut with all the juicy bits like price and dates added.
Need a Demat Account?
Yep, gotta have one (NSDL or CDSL) to apply—no way around it.
What’s DP Name?
It’s your Demat provider—like ICICI Securities if that’s where you opened your account.
PAN Card Required?
Since 2006, SEBI says yes—mess it up, and your app’s toast.
Multiple Apps with One PAN?
Nope, one PAN, one app—duplicates get the boot.
Apps from One Bank Account?
Depends—SBI lets you do 5 with different Demat accounts; ICICI sticks to 1. Check your bank!
BHIM UPI for IPOs?
Totally—SEBI’s cool with it. Link your bank on BHIM, use your UPI ID, approve the mandate, and you’re in.
Book Building vs. Fixed Price?
Book Building sets a range (you bid within), Fixed Price is one set number—IPOs can mix both.
RII, NII, QIB, Anchor—Who’s Who?
RII: Retail folks bidding under ₹2 lakh—10-35% of the pie, cut-off okay.
NII: Big spenders over ₹2 lakh—15% of the issue, no cut-off.
QIB: Institutions like banks or funds—50-75%, no withdrawals or cut-off.
Anchor: Heavy hitters (₹10 crore+) grabbing up to 60% of QIB’s share pre-IPO.
Retail in NII?
Bid over ₹2 lakh, and you’re NII—your choice!
How Long’s an IPO Open?
Usually 3 days, up to 10 if prices shift or exceptions pop up.
What’s Market Lot Size?
Minimum’s 1 lot (~₹15,000), max is 13-14 (~₹2 lakh) for retail—multiples in between.
Guaranteed Allotment?
No promises—under 1x subscription means firm shots, over that, it’s a lottery.
Basis of Allotment?
Registrar’s post-allotment doc—shows final price and ratio (e.g., 10:1 if 10x subscribed).
Multiple Apps Okay?
Yes, but different PANs and Demat accounts—ASBA, UPI, or forms all work.
Cancel an App?
During bidding, file a revision form with syndicate members—post-close, you’re locked in.
Minors Apply?
Some IPOs allow it—one app as guardian or retail, not both, or it’s rejected.
Picking the Right IPO?
Look for strong fundamentals, financials, demand, and a solid future—check size, band, and OFS too.
Ways to Apply?
ASBA (bank), UPI, or offline forms—your pick!
Risks?
No allotment guarantee, app glitches, rejections, or listing losses—heads up!
Retail Min/Max?
Min: ~₹15,000 (1 lot), Max: ~₹2 lakh (13-14 lots)—over that, you’re NII.
Withdraw an App?
During bidding, hit Order > IPO > Withdraw—funds back in 2-3 days.
Selling on Listing Day?
Pre-open’s 9:00-9:45 AM—enter, tweak, or cancel. Sell online or via broker once shares hit your Demat.
Wrapping It Up
IPOs can be a maze, but these FAQs cut through the noise—whether it’s prices, players, or processes.
Got more to ask? Hit us up—it’s your chance to shape this list!