FAQs
What is an IPO in India?
An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time in India. Through an IPO, the company gets listed on stock exchanges like NSE or BSE, allowing retail, institutional, and other investors to buy its shares.
Who regulates IPOs in India?
IPOs in India are regulated by the Securities and Exchange Board of India (SEBI). SEBI lays down rules related to disclosures, pricing, allotment, investor protection, and timelines to ensure transparency and fairness.
What is the book building process in an IPO?
The book building process is a price discovery mechanism defined by SEBI where investors bid within a price band. Based on demand at different price levels, the final issue price is determined before allotment.
What is the cut-off price in an IPO?
The cut-off price is the final price at which shares are allotted in an IPO. Retail investors can choose the cut-off option, agreeing to buy shares at the final discovered price without specifying an exact bid price.
What does IPO subscription mean?
IPO subscription refers to the number of times the shares offered in an IPO are applied for by investors. For example, 10x subscription means applications were received for ten times the number of shares offered.
What is IPO oversubscription?
Oversubscription occurs when the total number of shares applied for exceeds the number of shares available in the IPO. In such cases, allotment is done through a proportionate or lottery-based method.
What is IPO allotment?
IPO allotment is the process of allocating shares to investors after the IPO closes. If an IPO is oversubscribed, not all applicants receive shares, and allotment is done as per SEBI-defined rules.
How is IPO allotment done for retail investors?
For retail investors, SEBI mandates a lottery-based system when an IPO is oversubscribed. Each valid application has an equal chance of receiving at least one lot.
What is IPO allotment probability?
IPO allotment probability is an estimated likelihood of receiving allotment based on subscription data and number of applications. It is a mathematical approximation and not a guaranteed outcome.
How is IPO allotment probability calculated?
Allotment probability is conceptually calculated by comparing the number of available lots to the approximate number of valid applications in a category. For example, if there are 1,000 lots and 10,000 applications, the probability is roughly 10%.
What is an IPO allotment probability calculator?
An IPO allotment probability calculator is an educational tool that uses subscription data to estimate the chance of allotment. It helps investors understand odds but does not predict actual results.
Is IPO allotment probability accurate?
IPO allotment probability is approximate and depends on assumptions like equal applications per PAN and valid bids. Actual allotment may differ due to rejections, multiple applications, or category-wise adjustments.
Why can IPO allotment results differ from probability estimates?
Differences arise due to invalid applications, rejected bids, multiple applications from the same investor, category rebalancing, and rounding rules used during final allotment.
What role does the registrar play in IPO allotment?
The registrar (such as KFin Technologies or Link Intime) is responsible for processing applications, identifying valid bids, finalizing allotment, initiating refunds, and publishing allotment status.
How can I check IPO allotment status?
IPO allotment status can be checked on the registrar’s official website, BSE website, or NSE website using PAN, application number, or DP Client ID.
When do refunds happen for non-allotted IPO applications?
Refunds for non-allotted or partially allotted IPO applications are usually initiated within one working day after allotment finalization, as per SEBI timelines.
What is ASBA in IPO applications?
ASBA (Application Supported by Blocked Amount) is a mechanism where the application amount remains blocked in the investor’s bank account until allotment, ensuring faster refunds and safety.
What are common reasons for IPO application rejection?
Applications may be rejected due to invalid PAN, multiple applications, incorrect DP details, insufficient funds, or technical errors during bidding.
What is the difference between IPO, FPO, and OFS?
An IPO is the first public issue by a company, an FPO (Follow-on Public Offer) is a subsequent issue by a listed company, and an OFS (Offer for Sale) is when existing shareholders sell their shares through the exchange.
What risks are involved in IPO investments?
IPO investments carry risks such as listing volatility, overvaluation, lack of historical performance data, and market conditions affecting post-listing prices.
Are IPO tools and calculators officially endorsed by SEBI?
No. IPO calculators and tools are educational aids created by independent platforms. They are not endorsed, approved, or guaranteed by SEBI, NSE, or BSE.