Glossary · 10 terms
IPO
All ipo terms in the EquitiesIndia.com glossary — plain-English definitions written for Indian retail investors.
Allotment(Share Allotment)
Allotment is the process by which shares are formally distributed to successful IPO applicants after the subscription period closes, based on SEBI-prescribed rules for each investor category and the degree of oversubscription.
Anchor Investor(Anchor Allotment)
An anchor investor is a qualified institutional buyer (QIB) that is allotted shares in a book-built IPO on a discretionary basis one day before the subscription opens, providing a credibility signal to the market and locking in institutional demand before retail and other investors apply.
Book Building(Book Built IPO)
Book building is the price discovery process used in most Indian IPOs, where institutional and retail investors submit bids within a price band, and the final issue price (cut-off price) is determined by aggregating demand across all bids.
DRHP(Draft Red Herring Prospectus)
The Draft Red Herring Prospectus (DRHP) is the preliminary IPO registration document filed with SEBI by a company seeking to go public, containing detailed disclosures about the business, financials, risk factors, and intended use of proceeds, but without the final price or issue size.
Grey Market Premium(GMP)
Grey Market Premium (GMP) is the unofficial premium at which IPO shares or applications trade in the informal, unregulated grey market before the company's official listing on a stock exchange.
IPO(Initial Public Offering)
An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the public for the first time on a recognised stock exchange, raising primary capital and/or providing an exit to existing shareholders, regulated by SEBI's Issue of Capital and Disclosure Requirements (ICDR) Regulations.
Listing Day(Listing Date)
Listing day is the first day on which a company's shares are traded on a stock exchange following an IPO, with the opening price determined through a special pre-open session that aggregates orders before regular trading begins.
Lot Size(IPO Lot)
In the context of an IPO, lot size is the minimum number of shares an investor must apply for in a single application, with applications required to be in multiples of one lot, ensuring the minimum application value falls within SEBI's prescribed range.
Oversubscription(IPO Subscription)
Oversubscription refers to a situation where the total number of shares applied for in an IPO exceeds the number of shares available, with the ratio indicating how many times the issue was applied for relative to shares on offer.
Price Band(IPO Price Band)
A price band is the range between a floor price and a cap price within which investors can bid for shares in a book-built IPO, with the final issue price (cut-off price) determined by demand aggregated across all bids.