{"id":12209,"date":"2026-05-22T13:38:56","date_gmt":"2026-05-22T13:38:56","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/ipo-2\/"},"modified":"2026-05-22T13:38:56","modified_gmt":"2026-05-22T13:38:56","slug":"ipo-2","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/ipo-2\/","title":{"rendered":"IPO"},"content":{"rendered":"<p>An Initial Public Offering, or <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ipo\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>IPO<\/a>, is the process by which a private company offers its <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/shares\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">shares<\/a> to the public for the first time and gets listed on a <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stock-exchange\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">stock exchange<\/a>. For investors, an IPO is the chance to participate in a company&#x2019;s growth at the listing stage. For the company, it is a way to raise capital, provide an exit to early investors, and gain market visibility. India sees one of the most active IPO markets in the world, with both mainboard and SME segments active.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>IPOs let a company raise capital by selling shares to the public.<\/li>\n<li>India has two IPO platforms: Main Board and SME.<\/li>\n<li>Retail investors apply via <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/upi\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>UPI<\/a>-based <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/asba\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>ASBA<\/a> mechanism.<\/li>\n<li><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/lot-size\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Lot size<\/a>, price band, and <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/grey-market\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">grey market<\/a> <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/premium\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">premium<\/a> are key data points.<\/li>\n<li>Listing gains are popular but not guaranteed &#x2014; long-term performance varies.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"the-ipo-process-step-by-step\">The IPO process step by step<\/h2>\n<ol>\n<li>The company appoints merchant bankers and files a Draft <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/red-herring-prospectus\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Red Herring Prospectus<\/a> (<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/drhp\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>DRHP<\/a>) with <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/sebi\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>SEBI<\/a>.<\/li>\n<li>SEBI reviews and issues o<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bse\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>bse<\/a>rvations; the company files a Red Herring Prospectus (RHP).<\/li>\n<li>A price band and lot size are announced.<\/li>\n<li>Subscription opens for a few days; investors apply via ASBA-UPI.<\/li>\n<li>Allotment happens within a week; shares are credited to <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/demat-account\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">demat account<\/a>s before listing.<\/li>\n<li>The stock lists on <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nse\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>NSE<\/a> and\/or BSE.<\/li>\n<\/ol>\n<h2 id=\"types-of-ipo-investors-in-india\">Types of IPO investors in India<\/h2>\n<ul>\n<li><strong>Retail Individual Investors (RIIs):<\/strong> Up to &#x20B9;2 lakh application.<\/li>\n<li><strong>Non-<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/institutional-investor\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Institutional Investor<\/a>s (NIIs \/ HNIs):<\/strong> Above &#x20B9;2 lakh.<\/li>\n<li><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/qualified-institutional-buyers\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Qualified Institutional Buyers<\/a> (QIBs):<\/strong> <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/mutual-fund\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Mutual fund<\/a>s, insurance companies, FPIs.<\/li>\n<li><strong><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/anchor-investors\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Anchor investors<\/a>:<\/strong> QIBs who subscribe a day before the public issue.<\/li>\n<\/ul>\n<h2 id=\"how-to-apply-via-upi\">How to apply via UPI<\/h2>\n<ol>\n<li>Log in to your <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/broker\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">broker<\/a>&#x2019;s IPO interface.<\/li>\n<li>Select the IPO and enter your UPI ID.<\/li>\n<li>Choose lots (one or more) and bid price.<\/li>\n<li>Approve the UPI mandate on your phone &mdash; funds are blocked, not d<a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ebit\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>ebit<\/a>ed.<\/li>\n<li>On allotment, shares are credited and balance funds released.<\/li>\n<\/ol>\n<h2 id=\"key-terms-to-know\">Key terms to know<\/h2>\n<table>\n<tr>\n<th>Term<\/th>\n<th>Meaning<\/th>\n<\/tr>\n<tr>\n<td>Price Band<\/td>\n<td>Range within which bids are accepted<\/td>\n<\/tr>\n<tr>\n<td>Cut-off price<\/td>\n<td>Final allotment price chosen via book-building<\/td>\n<\/tr>\n<tr>\n<td>Lot Size<\/td>\n<td>Minimum number of shares per application<\/td>\n<\/tr>\n<tr>\n<td>GMP<\/td>\n<td>Grey market premium &#x2014; unofficial pre-listing premium<\/td>\n<\/tr>\n<tr>\n<td>Anchor Allotment<\/td>\n<td>QIB subscription before public bidding<\/td>\n<\/tr>\n<\/table>\n<h2 id=\"risks-of-ipo-investing\">Risks of IPO investing<\/h2>\n<ul>\n<li>Pricing risk &#x2014; IPOs may be overvalued; listing gains are not guaranteed.<\/li>\n<li>Lock-ins &#x2014; anchor investors and promoters have lock-in periods that can flood supply on expiry.<\/li>\n<li>Short-term <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/volatility\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">volatility<\/a> &#x2014; listing-day swings are common.<\/li>\n<li>Information asymmetry &#x2014; first-time public companies have limited disclosure history.<\/li>\n<\/ul>\n<h2 id=\"how-to-evaluate-an-ipo\">How to evaluate an IPO<\/h2>\n<p>Read the RHP carefully. Pay attention to financials (<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/revenue\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">revenue<\/a> growth, margins, <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/cash-flow\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">cash flow<\/a>), peer valuations (PE, EV\/<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/ebitda\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">EBITDA<\/a>), management quality, and use of IPO proceeds. Compare with listed peers and the broader market context. Avoid relying purely on grey market premium &#x2014; GMP is volatile and unregulated.<\/p>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"is-there-a-minimum-amount-to-invest\">Is there a minimum amount to invest?<\/h3>\n<p>Yes &#x2014; typically &#x20B9;14,000&#x2013;15,000 for one lot in mainboard IPOs.<\/p>\n<h3 id=\"can-i-apply-for-multiple-lots\">Can I apply for multiple lots?<\/h3>\n<p>Retail investors can apply for up to &#x20B9;2 lakh worth of shares, subject to lot size and price band.<\/p>\n<h3 id=\"when-do-i-see-the-ipo-shares\">When do I see the IPO shares?<\/h3>\n<p>Allotted shares are credited to your demat account a day before listing.<\/p>\n<h3 id=\"where-can-i-apply-for-ipos\">Where can I apply for IPOs?<\/h3>\n<p>Through any SEBI-registered broker (including Lemonn) via the UPI-based ASBA process.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>An Initial Public Offering, or IPO, is the process by which a private company offers its shares to the public for the first time and gets listed on a stock exchange. For investors, an IPO is the chance to participate in a company&#x2019;s growth at the listing stage. For the company, it is a way [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12209","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"An Initial Public Offering, or IPO, is the process by which a private company offers its shares to the public for the first time and gets listed on a stock exchange. For investors, an IPO is the chance to participate in a company&#x2019;s growth at the listing stage. For the company, it is a way&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12209\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}