An Initial Public Offer in short IPO is a another option for investment. If any private wants to sell their shares at first time to the public, the process of that the company’s ownership from private to public is called Initial Public Offering (IPO).
The company who is issuing the IPO must have to submit their annual reports of last 3 years which should have positive in terms of financial.(This clause if for those companies which are issuing ipo less than 500 crore.) After issuing of equity the paid up capital should have more than 10 crore.
If a one take IPO of any company then he will become the share holder of that company, then the customer have two choices, either he can sell his shares at when IPO launch or he can hold his shares for the tenure he want or Company can offer him for a dividend till the time he holds the share.
Basically IPO launch in a primary market, so here customer don’t require any demat account. but when there is a allotment of a shares then customer requires a demat account. IPO remains open for 3 to 10 days mostly. For acceptance of the subscription application time is 10.00 am to 5.00 pm except stock .exchange holidays. Basically IPO helped to established a trading mechanism for the shares of company.
Maximum lot size is six lots. It means per person investor can not buy more than six lots (1200) shares in the IPO. As per the new rule of 2023, Companies who is launching IPO now onwards require to have their share should be listed on the exchanges within a swift three days of closing the issue.