What is an IPO Subscription and its indications?

IPO Subscription is the number of times an initial public offering (IPO) has been subscribed for the BSE and NSE. Investors can put bids for IPO shares on any of the exchanges (i.e. BSE or NSE). Each exchange’s website displays live IPO subscription status for bids received. For the current IPO, we publish IPO live subscription. For all IPOs since 2006, we also publish the final bidding detail as of the last day of subscription.

2020 was a successful year for the equity market IPO (Initial Public Offering) segment. Over the course of the year, more than ten (10) firms went public, each with record subscriptions. In fact, three of the ten new IPOs garnered more than a hundred subscriptions. Companies in the food and beverage, IT, and BFSI industries received more attention than others.

What is an IPO Subscription and its indications?

IPOs allow corporations to raise capital from the market by selling a portion of their ownership in the company. It also provides investors with a lucrative opportunity to purchase shares at a low cost and profit at the time of IPO listing. Investors may also choose to hold the shares for a longer period to participate in the company’s growth narrative.

What is an IPO process?

Each new IPO goes through a similar process. The firm that wishes to go public must first hire an investment bank and then register the IPO. After the Securities and Exchange Board of India (SEBI) approves the registration application, the company applies to one or more stock markets to launch the IPO.

The company will then publicise the IPO in order to attract investors and set the price. Subscriptions are then accepted for the issue. The underwriter allots the shares after the subscription period has ended. If the issuance is oversubscribed, investors receive a portion of the proceeds. The IPO is then stated as the final step.

What is an IPO Subscription Status?

The number of times an IPO has been subscribed to on stock markets is referred to as IPO subscription. You can lodge an IPO bid with either the BSE or the NSE. You can view the most recent IPO subscriptions by visiting the respective stock exchange’s website. While the figures change throughout the subscription process, the final bidding details are available on the closing day of the IPO subscription process.

In general, there are three to five types of investors in an IPO. QIBs (Qualified Institutional Buyers), NIIs (Non-Institutional Bidders), retail individual investors, employees, and others are among them. Anchor Investors are a different type of investor.

When applying for a new IPO, you must be aware of the IPO subscription status. It provides the following advantages:

  1. You can forecast its market demand and predict its listing price – the larger the demand, the higher the IPO listing price may be.
  2. Seasoned traders/investors frequently examine the retail participation figure in an IPO to determine whether to invest in the company after listing.
  3. Depending on the status of the IPO allotment, you can determine your next course of action. If you receive the allotment, you must wait until the listing to sell or keep your investment. If you do not receive your allotment, you may utilise the funds for other purposes.
  4. Grey market pricing for an IPO is determined by IPO subscription data.

You may also read about: Why do companies launch their IPO?


What is an IPO Subscription and Allotment Status?

You can verify the IPO subscription status by going to the BSE website and looking for the IPO data. Alternatively, the IPO subscription status is regularly published by several brokerage platforms and publications. You can easily check the upcoming IPO’s investment status, measure investor mood, and determine whether to invest.

You can also verify the status of an IPO allotment by following the steps outlined below:

  1. Go to the website for the BSE IPO subscription status (link in the last step).
  2. Navigate to the ‘Issue Type’ page and choose ‘Equity.’ You can also monitor the status of your loan investments on the internet.
  3. Decide on an IPO name. To access the IPO list, you must first select an option from a drop-down menu.
  4. Enter your application number in the supplied box. The application number can be found on the acknowledgement receipt sent by the exchange/bank.
  5. Enter your PAN (Permanent Account Number).
  6. Check the box next to ‘I am not a robot’ and press ‘Search.’ Your allocation status, including the number of shares allotted, will be displayed on the BSE website.

Conclusion

If your name is among the lucky few who receive the IPO allotment, the shares should be transferred to your Demat account within three days of the allotted date. If you do not receive the allotment, the blocked funds will be released/ reimbursed either before or after the listing.