IPO FAQ – Everything You Need to Know in Simple Terms

Introduction:

An IPO (Initial Public Offering) is when a private company offers its shares to the public for the first time to raise money. Through an IPO, individuals can invest and become shareholders in the company. If you’re new to investing, IPOs can be a good starting point — but it’s important to understand how they work.

❓What is an IPO?

Answer:
An IPO is when a company offers its shares to the public to raise funds. It allows investors to buy ownership in the company.

❓How many types of IPOs are there?

Answer:

1. Mainboard IPO: For large companies with higher net worth and turnover.
2. SME IPO: For Small and Medium Enterprises, usually listed on special SME platforms.

❓What is IPO Open and Close Date?

Answer:

• Open Date: The first day when you can apply for the IPO.
• Close Date: The last date to submit your application.

❓What is Price Band?

Answer:
Price band is the range of prices (e.g. ₹387–₹407) within which you can place your bid. Final price is decided based on demand.

❓What is Issue Size?

Answer:
Issue size is the total amount of money the company aims to raise through the IPO.

❓What is a Lot in IPO?

Answer:
A lot is a fixed group of shares. You must apply for at least one lot (e.g., 36 shares per lot).

❓What is Listing Date?

Answer:
The day when the company’s shares are officially listed on the stock exchange (NSE/BSE) and can be traded.

❓What is Demat Credit Date?

Answer:
The date on which the allotted shares are credited to your Demat account.

❓What is Refund/Return Date?

Answer:
If you don’t get any shares in the allotment, your money is refunded on this date.

❓What is the difference between Retail Investor and HNI?

Answer:

• Retail Investor: Applies for shares up to ₹2 lakh.
• HNI (High Net-worth Individual): Applies for more than ₹2 lakh.

❓What is the Minimum Investment for Retail and HNI?

Answer:

• Retail: Minimum 1 lot (₹14,000–₹15,000 approx).
• HNI: Minimum investment is above ₹2 lakh.

❓What is RHP?

Answer:
RHP stands for Red Herring Prospectus. It is an official document containing the company’s financials, business details, risks, and IPO terms.

❓What is Allotment Date?

Answer:
The date on which it is decided who will receive shares and how many.

❓Who is a Registrar in an IPO?

Answer:
The registrar handles IPO applications, allotments, and refunds. Popular registrars include Link Intime and KFin Technologies.

❓How to apply for an IPO?

Answer:
You can apply through:

• Net Banking (ASBA): Via your bank’s online IPO section.
• Brokerage Apps: Like Zerodha, Groww, Upstox, etc.

You need:

• PAN Card
• Demat Account
• Bank Account
• UPI ID (for app-based IPOs)

❓What are the benefits and risks of IPOs?

Answer:

• Benefits: Get shares at initial price, potential listing gains.
• Risks: If company doesn’t perform well, share price may drop. Always do proper research.