Simple, practical explainers on the stock market, IPOs and investing.
Looking for one term? The A–Z glossary lists every explainer on one page.
90 articles
Before a company opens its public issue, it can sell shares privately to a small group of chosen investors. This note explains who buys in a pre-IPO placement, how such a round can shrink the fresh issue, where the transaction appears in the offer document, and how carefully to read the price it was done at.
Going public is a financing choice with strings attached. Companies list to fund expansion without repayment obligations, to reduce borrowings, to let founders and early investors sell, to pay for acquisitions in shares and to make employee stock realisable. This article explains each motive and the permanent costs that come with a listing.
Applying for an IPO takes a few minutes, but the sequence matters: a demat account linked to your PAN, a bid placed through a broker or a bank, and a payment mandate approved before the deadline. This guide walks through each step, the choices on the form, and the mistakes that get applications rejected.
A Draft Red Herring Prospectus is the detailed offer document a company files with SEBI before an IPO, containing restated financials, risk factors, litigation history and the intended use of funds. This article explains why it is called a draft, what SEBI does with it, and a practical order in which to read it.
A Red Herring Prospectus is the document under which an IPO is actually offered to the public. It carries the dates, the bid lot and usually the price band, but not the final issue price, which is discovered only after bidding closes. This article explains what changes from the draft and what stays open.
A book-built IPO opens with two numbers rather than one: a floor price and a cap price. This article explains what each end of the band means, why the corridor exists, how bids and the cut-off option feed a demand book, and why the final allotment price always lands inside the band.
An IPO application form will not accept a request for 37 shares. Bids move in fixed bundles called lots, and that single design choice shapes the minimum cheque you write, the category you fall into, and whether an oversubscribed issue treats you as a lottery ticket or a proportion.
Issue size is the number of shares an IPO offers multiplied by the issue price — the total value of the stock on sale, and not the company's valuation. This article separates the fresh-issue and offer-for-sale halves, shows where the money from each actually lands, and explains why a large issue and a small one behave differently under the same demand.
An Indian IPO is usually described in two parts: a fresh issue and an offer for sale. The two lines sit next to each other on the cover page but describe different transactions, with money flowing to different places. This article explains where the cash goes, what dilution means, and how to read a mixed issue.
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