The IPO Process in India 🇮🇳

The IPO process is a multi-step journey for a private company to become publicly listed. The key stages are:

1. Filing the DRHP: A company seeking to go public files a Draft Red Herring Prospectus (DRHP) with SEBI. This document provides detailed information about the company’s financials, business operations, risks, and the planned use of the IPO proceeds.
2. SEBI Approval: SEBI reviews the DRHP to ensure all regulatory requirements are met. Once satisfied, it issues its observations or approval.
3. Book Building: For most IPOs, the company uses a “book-building” process to determine the share price. This involves a period where investors can bid for shares within a specified price band. The final price, known as the cut-off price, is set based on the demand from investors.
4. Public Subscription: This is the “live” IPO period. The issue opens for subscription, and different categories of investors—retail, high-net-worth individuals (HNIs), and Qualified Institutional Buyers (QIBs)—can apply for shares.
5. Allotment and Listing: After the bidding closes, shares are allotted to successful applicants. The company’s shares are then listed on a stock exchange (NSE and/or BSE), where they can be freely traded.