IPO FAQ — 25+ Questions Answered

The minimum investment in an IPO equals the issue price multiplied by the lot size. For mainboard IPOs, the minimum retail application is typically between ₹13,000 and ₹15,000. SEBI mandates that retail IPO lot sizes be calibrated so that the minimum application amount stays within this range. For SME IPOs, minimum investment is often ₹1–2 lakh due to larger lot sizes.

The price band is the range within which investors can bid for IPO shares. The lower end is the "floor price" and the upper end is the "cap price." Most investors bid at the cap price to maximize allotment chances. The final issue price (cut-off price) is determined by the company and investment banks after analyzing the bids received during the book-building process.

Book building is the process by which an IPO price is determined through investor demand. Investment banks (book running lead managers) collect bids from institutional and retail investors at various prices within the price band. Based on the demand pattern, the company fixes the final issue price at or below the cap price. Most IPOs in India use the book building method.

SEBI introduced the T+6 listing timeline, where T is the IPO closure date. Under this framework: T+1 = basis of allotment finalized; T+2 = refunds initiated and shares credited to Demat; T+3 = shares available for trading (listing day). This significantly shortened the previous T+6 timeline, allowing investors to trade sooner and reducing the period of funds being locked.

Anchor investors are qualified institutional buyers (QIBs) who are allocated up to 60% of the QIB portion of an IPO on a discretionary basis, one day before the IPO opens for public subscription. Anchor investor participation signals institutional confidence in the IPO. Anchor investors are subject to a 30-day lock-in period on their allotted shares.

Bidding at "cut-off price" means you are willing to buy shares at whatever final price the company decides within the price band. SEBI mandates that retail investors (applying up to ₹2 lakh) must bid at the cut-off price. This is the recommended approach for retail investors as it ensures you don't miss out if the issue price is set higher than your specific bid price.

Both NSE Emerge and BSE SME are platforms for smaller companies to list their shares. NSE Emerge is the SME platform of National Stock Exchange, while BSE SME is Bombay Stock Exchange's equivalent. Companies typically choose one platform for listing. Both have similar listing criteria but some differences in fee structures. Shares listed on NSE Emerge can only be traded on NSE; BSE SME shares only on BSE.

IPO investing carries several unique risks: (1) Limited financial history — companies going public often have a short operational track record; (2) Overvaluation risk — IPOs can be priced aggressively; (3) Post-listing volatility — shares can fall sharply below the issue price after listing; (4) Lock-in for promoters — large insider selling after lock-in expiry can depress prices. Investing in IPOs should be based on fundamental analysis, not just GMP or listing gain expectations.

GMP is the unofficial premium at which IPO shares trade before listing. Example: IPO price Rs.100, GMP Rs.40 = grey market expects listing at Rs.140. GMP is unregulated, can be manipulated, and does not guarantee listing performance. Use it as one signal — not the only factor.

Kostak is the amount a grey market buyer pays for your entire IPO application regardless of allotment. E.g., Kostak Rs.1,000 means you get Rs.1,000 even without shares. This is an unofficial, unregulated transaction. We show Kostak for informational purposes only.

Moderately reliable — directionally correct in ~65-70% of cases. But GMP can be manipulated especially in SME IPOs. High GMP sometimes causes profit-booking at listing, so stocks open below GMP. Always combine with: subscription data (QIB especially), fundamentals, sector sentiment, and market conditions. Never apply based on GMP alone.

For retail (applications up to Rs.2 lakh): computerized lottery when oversubscribed. Each winning applicant gets exactly 1 lot regardless of how many lots applied. SEBI ensures at least 1 lot per applicant if lots > applicants. Strategy: apply from multiple family members (different PANs) each for 1 lot.

Three ways: (1) Registrar website — enter PAN on Link Intime, KFin, or Bigshare website. (2) BSE website: bseindia.com → Investors → Application Status. (3) Broker app IPO section. Allotment finalised T+6 days after IPO closes. Shares credited to Demat 1 day before listing.

Timeline: IPO Close → T+1 Allotment finalisation → T+5 Share credit to Demat → T+6 Listing day. Unallotted money unblocked on allotment day (T+1). Allotted shares credit 1 working day before listing. Check Demat app (Zerodha Kite, Groww, Upstox) or CDSL/NSDL website.

If your IPO application does not receive allotment, your application money (which was blocked via ASBA) is unblocked and becomes available in your bank account within 1-2 working days after allotment finalization. For UPI-based applications, the UPI mandate is automatically revoked. No action is required from your side.

Yes, retail investors can apply for up to ₹2 lakh worth of shares (multiple lots). However, whether you apply for 1 lot or the maximum retail lot, your probability of getting allotment in an oversubscribed IPO remains the same in the retail category — the lottery is based on unique applications, not lot size. Applying for more lots does NOT increase your chances of allotment.