In an Initial Public Offering (IPO) a company sells its shares to investors in order to raise money. As a retail investor, you can apply for an IPO from the primary market in order to get the shares offered by the company. Once the shares get listed on the secondary market, you can sell your shares provided you have received an allotment in the primary issue.
An IPO or Initial Public Offering is when an unlisted company gets listed on the Indian stock exchanges such as NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). Historically, companies go public when they want to raise fresh capital for the company or when the existing shareholders want to sell their stake. Either way, retail investors have two ways to get shares in an IPO.
The terms for selling in both these cases are different. Let’s look at if you could sell the IPO shares quickly.
As discussed earlier, there are two ways to obtain the shares of a company. It includes either buying it before the IPO through private placement companies or through ESOPS or applying in the primary market at the time of the IPO. Hence the answer to the question, “Can you sell the shares immediately?” is a Yes and No.
As most retail investors get the shares through an IPO, the first scenario would not be relevant for the majority of investors. Therefore, Yes, you can sell your IPO shares immediately after the stock gets listed. There are no restrictions related to that.
IPO or Initial Public Offering is a way through which a company raises capital by giving its shares to the public. A IPO after getting listed on the exchanges can be traded by investors. The shares can be sold directly on the day of the listing since the shares have already been allotted to the investors.
If you have applied for an IPO and received an allotment for the same, you can undoubtedly sell the shares on the date of listing. However, if the shares list at a premium (Above issue price), you can sell the majority of the shares at a profit and hold on to some of the remaining, for the long run. Whereas, if the IPO lists at a discount to the issue price, you can book the loss and look for a better opportunity to re-enter at a lower price.