IPO or an Initial Public Offering is the first sale of a company’s equity to the public. Initial Public Offer of good and growing Companies keep on coming in the market. One should keep a tap on such IPO’s. It has been observed over the years that investors, who bought equity shares (through primary market) as long term investment have made sizeable amount.
WHAT IS IPO
IPO or Initial Public Offer is a way for a company to raise money from investors for its future projects and get listed to Stock Exchange. From an investor point of view, IPO gives a chance to buy shares of a company, directly from the company at the price of their choice (In book build IPO’s). Many a times there is a big difference between the price at which companies decides for its shares and the price on which investor are willing to buy share and that gives a good listing gain for shares allocated to the investor in IPO.ISSUE TYPES
- Fixed Price In a ‘Fixed Price’ shares are sold at a single price/fixed price. This price is determined by the company in advance, and you (the buyer) can buy the shares only at that decided price. E.g. If XYZ Industries Limited decides to make a public issue of 10,00,000 equity shares at a price of Rs. 50/- you can buy the share at Rs. 50/- and cannot ask for a price of Rs. 60/- or Rs. 40/-
- Book Building Issue ‘Book Building’ is a price discovery mechanism used to determine the price of the security proposed to be issued. ‘Book Building Issue’ is generally used when the issuer doesn’t want to fix a certain price on the security. Here, unlike the ‘Fixed Price Issue’, you (the bidder) have the facility to bid for the shares within the given range/price band. E.g. If XYZ Industries Limited decides to make a public issue of 10,00,000 equity shares, it will, instead of a fixed price, announce the price band of Rs. 50/- to Rs. 60/-. You (the bidder) can then place your bids for the shares between this price band/range
TYPES OF APPLICANTS
- Retail Individual Investor means an investor who applies or bids for securities of value not more than Rs. 2,00,000/-
- Non-Qualified Institutional Buyer means an investor who bids for an amount above Rs. 2,00,000/- and does not fall in the QIB category e.g. HNI investors.
- Qualified Institutional Buyer(QIB) means Public financial institution as defined in section 4A of the Companies Act, 1956 Scheduled commercial banks Mutual funds/venture funds/insurance companies/provident funds Foreign Institutional Investor registered with SEBI
WHY INVEST WITH US
- Advantage of either applying for IPOs through online platforms as well as offline
- Attractive customized brokerage plans to suit your needs and risk appetite
- IPO recommendations for select offers provided by our advisory team
BENEFITS OF INVESTING IN IPO
- Opportunity to get the stock at the lowest possible price
- No refund hassles under ASBA process
- Can invest in stock at discounted price rather than the cut-off price.
- Opportunity to be a part of the growth story of the issuing company
