In this PPT we will discuss What is an IPO? Market types, the purpose of the company's issue, the various types of issue, who can apply? How shares are allotted, how to apply, and key terms related to IPO. i hope this helps.

2. Index
 1. What is IPO
 2. Types of Market
 3. Purpose of the issue
 4. Type of Issue
 5. Who can apply for IPO
 6. How shares are allocated in IPO
 7. Steps to apply for IPO
 8. Key terms

3. What is an IPO ?
 The process through which a private firm becomes public by selling its stock to
the general public is known as an initial public offering (IPO).
 It could be a new, young, or old company that decides to list on an exchange and
thereby goes public.
 Companies can raise equity capital by issuing new shares to the public through
an IPO, or existing shareholders can sell their shares to the public without
generating any new capital.

4. Types Of Market
Sr.No. Primary Market Secondary Market
1.Definition The primary market refers to
securities that are issued for the
first time to the general public.
The secondary market is where
securities that have already been
issued and listed are traded.
2. Also called
as
New Issue Market. Post Issue Market.
3. Price
Determination
By the Issuer Company in
collaboration with Merchant
Bankers.
Market Supply and Demand
Forces.
4. Key
Intermediaries
RTAs, Merchant Bankers,
Bankers/Lead Managers.
DPs and stock brokers.

5. Purpose of Issue
Purpose
of the
Issue
Diversifica
tion
Expansion
of existing
projects/
moderniza
tion
New
Projects
Up-
gradation

6. Type of issue
 Fixed price issue
 A fixed price is one that is set by the proprietors of the company with the assistance of a
merchant banker.
 The price is determined following an examination of the assets, liabilities, and other financial
elements, and a fixed price is determined depending on the outcome to reach their target
funds.
 Book building issue
 In the book building issue, there is no fixed price. During the IPO process, the price is
discovered. The book building issue addresses the floor price as well as the cap price. The
floor price is the band's lowest price, while the cap price is the band's highest price. The
price is set by the bidding mechanism, in which offers from interested investors are collected
at various values greater than or equal to the floor price.

7. Who can apply for IPO
 Qualified Institutional Bidders
 Retail Individual Investors
 Non-institutional bidders (NII)
 Foreign Institutional Investors
 High Net worth Individual (HNI)

8. How shares are allocated in IPO
• As an individual investor, you are permitted to invest in small lots ranging from Rs 10,000 to Rs
15,000.
• You can apply for a maximum of Rs 2 lakhs.
• The entire demand for retail shares is determined by the number of applications received. If the
demand is less than or equal to the number of shares available in the retail category, you will be given
the entire allotment of shares.
• Oversubscription occurs when the demand exceeds the available allocation. For an e.g. If an IPO is
oversubscribed five times. This suggests that the demand for shares is five times greater than the
supply.
• In such circumstances, retail shares are distributed to investors through a lottery system.
• This is a computerized method that ensures the fair distribution of shares to investors.

9. STEPS to apply for IPO online

10. IPO key terms
 Common Shares
Units of ownership in a public business that normally entitle holders to vote on
company decisions and receive dividends from the company.
 Issue Price
The price at which an IPO company's common stock will be sold to investors before it
begins trading on public exchanges. Popularly known as the listing price.
 Lot Size
The smallest amount of shares available for purchase in an IPO. You must bid in
multiples of that lot size if you want to buy more shares.

11. IPO key terms
 Prospectus preliminary
It is a document that discloses information about its business, strategy, historical financial
statements, recent financial results, and management.
It is frequently referred to as the "red herring" since it has red lettering down the left side
of the front cover.
 Price band
The price range for IPO shares specified by the firm and the underwriter.
It differs depending on the type of investor. Qualified institutional buyers, for example,
may have a different price range than retail investors like you.

12. IPO key terms
 Underwriter
The investment bank in charge of managing the offering on behalf of the issuing
corporation.
In general, the underwriter establishes the issue price, publicises the IPO, and assigns
shares to investors.