IPO is the primary stage where the company goes public and starts gaining investments from people. It is essential for the company to manage the details properly. For Public, IPO should remain open for at least 6 days and for maximum 10 days.
IPO- Initial Public Offering is a type of public offering in which shares of a company are sold usually when the company needs additional funds which can help them in expanding the business, increase their working capital, repaying the debts, etc. While the company issues IPO they need the change the company from private to public if it is not. IPO can be applied via both online and offline.
After receiving the applications: As per the clause 8.8.1, the public issue’s subscription list should be accessible to public for at least 3 working days but maximum for 10 working days.
There are two types of IPO:
In Book Building issue, the prices are determined within the band of the bidding process. The stakeholders need to decide and be agreed on a single price and then this is how the firm sells its shares to them. It can only have public issues like IPO and FPO. Its demand can be known on a real time basis and is also obtainable at various prices.
In this issue, the company commences 20% of the price range on the stocks to the people who invests. The minimum days for which trading is open is 3 days and the maximum days are 7, which can be extended by 3 days in case the revision is needed in the price range.
In Fixed price issue, the price is already mentioned in the brochure and then the shareholders need to buy the shares at that individual price. In this, the price is fixed for the public issue and consists of the total number of the shares that are to be obtainable by the public and its price detailing. In this case, this data is available only after closing the issue through an advertisement made by public, issued within 10 days of transmission of the certificates of allotment or refund orders.
In the primary market, right shares are issued on a pro-rata basis to the existing shareholders when they buy additional shares of the company at a price less than that of the actual market price. According to the clause 8.8.2., these shares and open for a minimum of 30 days and a maximum of 60 days.