What is listing?
Shares offered in IPOs are required to be listed on a stock exchanges for the purpose of trading. Listing means that the shares have been listed on the stock exchange and are available for trading in the secondary market.

How long will it take after the issue for the shares to get listed?
The listing on the stock exchanges is done within 7 days from the finalization of the issue. Ideally, it would be around 3 weeks after the closure of the book built issue. In case of fixed price issue, it would be around 37 days after closure of the issue.

How can an investor trade after listing?
An investor can trade by opening a broking account with a registered stock broker. He can place an order for sale of the number of shares he wants to sell and also fix the price at which he wants to sell at. Remember on the day of listing, there are huge volatility generally witnessed in the price of shares as the price discovery mechanism come into place for arriving at the fair price in the secondary market.

Whether listing price will be higher than the offer price?
It is not necessary that the price discovered in the secondary market after listing of shares would be higher than the IPO price. That is the price risk that you have to assume for investing in IPOs.

What happens if I am at a loss after listing?
You can hold the shares if you do not want to sell shares at a loss as market may move favourably again.

Whether companies have to sign any agreement with stock exchanges for listing
All companies desirous of listing their securities on a stock exchange have to sign an agreement with the stock exchanges where the securities are listed. The agreement casts obligations on the companies to follow the listing rules and in case of violations, stock exchanges can impose monetary penalty against companies and also decide to delist the shares.

Where can an investor get a form for applying/ bidding for the shares?
The form for applying/bidding of shares is available with all syndicate members, collection centers, the brokers to the issue and the bankers to the issue. These are also available with your friendly neighborhood news paper vendors and sub brokers.

How are offer documents prepared?
The offer documents such as prospectus etc. are prepared by an independent entity know as Merchant Banker, which is registered with regulatory authority SEBI. They are required to carry out due diligence while preparing an offer document. The draft offer
document submitted to SEBI is put on website for public comments. 

 

Is it compulsory for an investor to have a Demat Account?
All the public issues of size in excess of Rs.10 crore, are to made compulsorily in the demat more. Thus, if an investor chooses to apply for an issue that is being made in a compulsory demat mode, he has to have a demat account and has the responsibility to put the correct DP ID and Client ID details in the bid/application forms. This is very important as a lot of applications are rejected due to carelessness in putting right details in the application forms. You can open a DP account with any of the registered DPs and quote your BO/Client ID in the application. 

 

Do I need to mention Bank Account Details in the application?
In case of refund of application money in case of non allotment of shares or partial allotment of shares, it is advisable to have funds directly credited to your bank accounts to avoid postal delays and frauds. Hence mention of your bank account details on applications has been made applicable for investors for their own convenience.

For How many days are IPOs open.
IPOs are open for a minimum of 3 working days and maximum of 10 working days. In case of Book Building issues, the period during which you can make an application is 3 to 7 working days.