What is an IPO?
Do you know what a “Initial Public Offering” is or what the phrase “IPO” means? This is the procedure for a firm to be listed on the Indian stock exchanges. This page will teach you more about the listing process.
In India, there are two major stock exchanges. They are as follows:
- The Bombay Stock Exchange (BSE) is a stock exchange in Mumbai, India.
- The National Stock Exchange (NSE) is a stock exchange.
A firm would like to raise capital for expansion and other uses. They choose from upcoming IPOs, in which they sell their stock and raise funds from the general public. An Initial Public Offer is the name for this procedure.
The Initial Public Offering (IPO) Process:
The SEBI receives a DRHP (Draft Red Herring Prospectus) application from a corporation (Stock Exchange Board of India).
Investment bankers are hired by the company to oversee the IPO and raise financing. They examine the balance sheet and assets held by the company, as well as the company’s current valuations.
Additional info: How is an Initial Public Offering (IPO) valued?
They set the price band for the IPO after evaluating the values, which is set in relation to peers that are currently listed on the exchanges. If the price is set in line with its rivals, the IPO’s prospects of being subscribed to are strong.
The issue will then begin on the appropriate issue date. On the corresponding dates, investors can apply for the IPO.
Following the close of the subscription period, stocks offered from IPO listing in India will be allocated to applicants based on their subscription status. It will take two to three weeks for the company to be listed on the exchanges.
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