december 18, 2024
Lot size, OFS and more: Key IPO terms decoded
An Initial Public Offering (IPO) is when a company sells its shares to the public for the first time. The company raises capital by getting listed on the stock exchanges.
Let’s take a look at important terms like OFS, lot size and more to understand IPOs better.
An offer-for-sale (OFS) is when existing shareholders of the company sell a part of their holdings in an IPO. The proceeds from the issue go to the shareholders and not the company.
OFS
A fresh issue is when a company issues new shares to raise funds in an IPO. The proceeds from the fresh issue are used for company growth, debt repayment and other operations.
Fresh issue
In an IPO, the lot size is the minimum number of shares investors can apply for. It decides the minimum investment needed for applying to the issue and applications are made in multiples of this number.
Lot size
The price band is the range in which investors can bid for shares in an IPO. The final price is decided based on market demand and subscriptions for the issue.
Price band
The subscription status shows how many times an IPO is booked. It compares the shares bid for to the shares offered. A high subscription for an IPO means strong investor interest.
Subscription status
Listing day is when the company’s shares are listed on the stock exchanges and are open for trading. The listing price depends on market demand and investor sentiment for the IPO.
Listing day
Who are RII, NII and QIB investors in an IPO?
Thanks for reading!
See next