Concerning IPO
The procedure by which a formerly fully private company makes its shares available for public trading on an exchange is known as an initial public offering, or IPO. When a business decides to go public, it employs investment banks to make sure that a significant amount of public capital is raised. Primary and secondary markets are the two categories of share markets. The public invests in the most recent impending initial public offering (IPO) in primary marketplaces.
Significant advertising, regulatory compliance, and due diligence are all part of the process. Retail and institutional investors are among the public purchasing the recently offered shares, while the company’s promoters and original investors are among those selling the shares.
What is Upcoming IPO?
It’s critical to be informed about the most recent initial public offerings (IPOs) in the stock market because:
- Based on your analysis of the firms and the mood of the market around the IPO, you can then appropriately prepare your IPO investment strategy. As a result, you may decide on the IPO investment with greater knowledge.
- You can follow the IPO’s progress even if you decide not to invest in it right now. This will assist you in comprehending how the market feels about initial public offerings (IPOs) and their industries generally. It will help you better time your investments overall and broaden your knowledge of the capital markets.
Who is Eligible to Invest in an IPO?
Companies who have submitted the Draft Red Herring Prospectus (DRHP) are anticipated to open their initial public offerings (IPOs) in the upcoming weeks or months of 2025.
It’s critical to be informed about the most recent initial public offerings (IPOs) in the stock market because:
Anchor investors
QIIs with assets over ₹10 crores who apply for the IPO are regarded as anchor investors. Up to 60% of the shares set aside for the QIIs may be acquired by them.
Institutional investors who are qualified (QIIs):
Commercial banks, government agencies, mutual funds, and foreign portfolio investors who have registered with SEBI are examples of QIIs. Institutional investors must sign a contract that locks them into the IPO for ninety days in accordance with SEBI standards. This is done in an effort to minimize volatility during the IPO process.
Individual investors
Each new IPO allows retail investors to contribute up to ₹2 lakh. Under a quota, companies are required to reserve at least 35% of the issuance for retail investors. Additionally, SEBI has ordered that all retail investors receive at least one lot of shares in the event that the offer is oversubscribed. A lottery technique will be used to distribute the IPO shares to the general public if it is not feasible to give one lot to each investor.
Non-institutional investors (NIIs) or high-net-worth individuals (HNIs)
If an investor chooses to invest between ₹2 lakh and ₹5 lakh in the IPO, they are automatically classified as an HNI. Conversely, institutions looking to invest more than ₹2 lakh are considered non-institutional investors. The distinction between an NII and a QII is that the latter are exempt from SEBI registration requirements.
