Everything You Need To Know About IPO Listing Time

Have you ever invested in the stock market? Investing in the stock market can be an exciting journey, and Initial Public Offerings (IPOs) often serve as an attractive entry point for many investors. However, the process surrounding IPOs, especially IPO listing time, can sometimes seem complex. But no worries, we are here to help you with all about IPO investing. 

This blog will walk you through every aspect of IPOs, including their meaning, the process, subscription, listing, listing time, and more. By the end of this detailed piece, you will have a clear understanding of IPOs and their role in your investing journey. 

So, let us get started with the IPO meaning:

IPO Meaning

An Initial Public Offering, or IPO, is when a private company offers its shares to the public for the first time. This is a significant milestone for any business as it transitions from being privately held to a publicly traded entity. By launching an IPO, companies aim to raise capital for expansion, pay off debt, or meet other financial goals.

For you as an investor, an IPO is an opportunity to invest in a company at an early stage of its public life. It can be a chance to acquire shares at their initial price before they become available in the open market. Many investors explore IPO investing as they open free demat account. They look at IPO investing as a way to diversify their portfolio or to tap into the growth potential of emerging companies.

IPO Process

The IPO process involves several stages, ensuring that the company complies with regulatory standards and offers transparency to potential investors. 

Here is a step-by-step breakdown of the IPO process:

Decision To Go Public

A company decides to go public to raise funds. This process involves evaluating its financial health, business model, and growth potential.

Selection Of Underwriters

The company collaborates with investment banks to manage the IPO. These investment banks are called underwriters. Underwriters help determine the offer price, the number of shares, and the overall structure of the IPO.

Filing With SEBI 

In India, the company must file a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). This DRHP document contains detailed information about the company, its financials, and the risks involved.

Approval And Roadshows

After SEBI’s approval, the company and underwriters conduct roadshows to promote the IPO to institutional investors.

Price Band Announcement 

After the price band for the IPO is announced, the investors can bid for shares within this range during the subscription period.

Subscription Period

The IPO is open for subscription for a few days. During the subscription period, retail investors, qualified institutional buyers (QIBs), and non-institutional investors (NIIs) can apply for shares. 

IPO Subscription

The subscription stage is where you, as an investor, can bid for shares. IPOs are often categorised into three segments at this stage. These segments are as follows:

Retail Investors

This category includes individual investors applying for shares worth up to ₹2 lakh. As a retail investor, you might have checked the upcoming IPO announcement in a stocks app.

Qualified Institutional Buyers (QIBs)

QIB investors include entities like mutual funds and insurance companies.

Non-Institutional Investors (NIIs)

These are individuals or organisations bidding for shares above the ₹2 lakh limit.

To subscribe to an IPO, you can use a trading app or a demat app. These platforms allow you to place bids seamlessly. Once the subscription closes, the allotment process begins. If an IPO is oversubscribed, not all applicants may receive shares. However, the IPO oversubscription can also be an indicator that the stocks might list at a premium.

IPO Listing

After the shares are allotted, the company’s stock is listed on a stock exchange, such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE). The IPO listing is a critical event as it marks the first time the company’s shares become available for trading on the secondary market.

The listing price is determined by demand and supply dynamics during the subscription phase. If demand is high, the listing price may be significantly higher than the offer price, creating a listing gain for investors.

IPO Listing Time

The IPO listing time is the exact moment when shares of a company are officially available for trading (buying and selling) on the stock exchange. Typically, the gap between the closing of the subscription period and the IPO listing is around six working days. During this time, the following activities take place:

Share Allotment

Shares are allotted to successful applicants based on the subscription data. You can check your allotment status through your trading app or demat app.

Refunds And Demat Credit

Refunds are initiated for unsuccessful applicants, and shares are credited to the demat accounts of successful ones.

Pre-Listing Activities

The stock exchange ensures that all technical and regulatory requirements are met before the IPO listing.

On the listing day, the stock’s trading typically begins at 10:00 AM. Many investors keenly await this moment to either sell their shares for a profit or hold onto them for long-term gains. They are tuned in to news and media channels to stay updated on the IPO listing projections and listed stock prices. They can also check for these IPO listing details on their stock market app. Understanding the timing and dynamics of the IPO listing can help you plan your strategy effectively.

Conclusion

IPO investing can be a rewarding way to participate in the growth stories of promising companies. By understanding the IPO process, subscription details, listing, and listing time, you can make informed decisions. Make sure to use a reliable trading app or demat app to streamline your investment journey.

Keeping an eye on upcoming IPOs is also essential to staying ahead in the investment game. While IPOs can offer significant returns, they also come with risks, so always conduct thorough research and assess your risk appetite before investing.

You can start exploring IPO investing today and take a step closer to achieving your financial goals through the world of stocks.