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ListingShares 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. |
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