IPOs, or Initial Public Offerings, are a way for companies to go public and raise funds by inviting retail investors to buy stocks. Companies must submit detailed documents like the prospectus to get approval from SEBI, the Security Exchange Board of India. Once approved, the IPO date is set, shares are allotted, and then they are added to investors’ portfolios.
Application for IPOs can take place in a regular manner or through a HNI manner. Regular retail investors cannot subscribe over a certain limit; however, HNIs get a chance to subscribe to more shares and lots. Each application comes at a price which is a range set by SEBI. There is an upper limit and a lower limit to it. The maximum amount under a retail quota for a single lot of shares in IPOs is ₹15,000.
The success of making returns in IPOs is partially dependent on the subscription rate and the grey market price. The more a share is oversubscribed, the more chances it has to provide gains on listing. This happens when the company is good, has strong fundamentals, and people believe in its future potential to perform.
Let’s talk about how to build a portfolio that includes IPOs:
Other things you can do to verify the companies you are rooting for:
If you do the above, you can pick companies that are strong and have a better future.
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