Stock Market · Introduction to Stock Markets

The IPO process from start to listing

An IPO (Initial Public Offering) is when a private company first sells shares to the public. It goes from 'owned by a few' to 'anyone can buy a piece.'

The steps

1. Company hires investment banks as book-running lead managers.

2. Files a DRHP (Draft Red Herring Prospectus) with SEBI. Full financial disclosure. Public document. Read it.

3. SEBI reviews and approves.

4. Roadshows. Management pitches to institutional investors.

5. Price band set. A range like ₹450–₹470. You can apply at any price within this band.

6. Subscription window. 3 days. Apply via your broker using ASBA (UPI-linked). Your money is blocked, not debited, until allotment.

7. Allotment, if oversubscribed, retail gets shares by lottery. UPI block releases if you're not allotted.

8. Listing day. Stock starts trading on NSE/BSE, usually at a premium or discount to issue price.

> Zomato's 2021 IPO was subscribed 38 times. 38 applications for every 1 share available. Most retail investors got nothing. Even with a ₹15,000 application.

Key terms

• Oversubscribed, more applications than shares. Common for hyped IPOs.
• GMP (Grey Market Premium), unofficial pre-listing price signal. Not legally recognized but widely tracked as a listing price predictor.
• Lot size, minimum shares per application, usually 10–15 shares.

38×Zomato IPO subscription rate (2021)

₹9,375 crAmount Zomato raised in its 2021 IPO

Takeaway. Applying to an IPO is a lottery when oversubscribed. Read the DRHP before applying, not just the listing price buzz.