What is an IPO?

 Today we are going to discuss IPO's

What is an IPO?

Indian Public Offerings is a process through which a Priva.te company is going to sell its share to the General public.

In other words, a company is providing or making us a part of the business ..Someone who acquires more like says more than 50 %  can even become a promotor of the company.

Generally, an IPO is issued into 3 categories

• General Public
• QIB
• NII

Now, the percentage of shares differs from one category to another.

Let's see

QIB (): SEBI has defined a Qualified Institutional Buyer as follows: Qualified Institutional Buyers are those institutional investors who are generally perceived to possess the expertise and the financial muscle to evaluate and invest in the capital markets. In terms of clause 2.2.

Mostly these are the one who will hold most part of the share percentage

RII:  "Retail investors " Who are bidding in an IPO  for capital or share worth not more than 2 Lakhs.

NII: All applicants, other than QIBS or Individuals for less than Rs 2,00,000 are considered as NIIs

Normally the percentage of  shares goes like this 

• 75% of shares will be allotted to QIBS.
• 15 % of shares will be allotted to NIIs.
• 10% of shares will be allotted to RIIs.

In the IPO there is one more thing that we need to consider which is Grey Market which tells for how much the people are willing to buy it.  If the premium of the share is high then it would be listed at a higher price then the issue prices.

Let try to understand with an example :

Happiest Mind IPO :

The CEO  of the company is ASHOK SOOTA who in the past has given us a stock like MIND TREE he is being in this industry for a very long  time

This IPO is segmented as follows

Issue Open	Sep 7, 2020
Issue Close	Sep 9, 2020
IPO Price	₹165 - ₹166
Face Value	₹2
IPO Size	₹702.02 Cr
Listing At	BSE, NSE
IPO Lot Size	90

Happiest Minds IPO subscribed 150.98 times. The public issue subscribed 70.94 times in the retail category, 77.43 times in QIB, and 351.46 times in the NII category by Sep 9, 2020.

Category	Subscription Status
Qualified Institutional	77.43 Times
Non-Institutional	351.46 Times
Retail Individual	70.94 Times
Total	150.98 Times

Happiest Minds IPO Subscription Details (Day by Day)

Happiest Minds IPO live subscription details on a day to day basis by the investor's category from BSE and NSE. Till Sep 9, 2020 17:00, the public issue subscribed 150.98 times. Happiest Minds IPO received bids for 70.94 times issue size in retail, 77.43 times issue size in QIB, and 351.46 times issue size in the Non-institutional category.

Date	QIB	NII	Retail	Total
Sep 7, 2020 17:00	0.08x	0.62x	14.61x	2.87x
Sep 8, 2020 17:00	0.47x	3.96x	38.85x	8.40x
Sep 9, 2020 17:00	77.43x	351.46x	70.94x	150.98x

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Happiest Minds IPO Shares Offered

Happiest Minds IPO is a public issue of 23259550 equity shares. The issue offers 4229009 shares to retail individual investors, 12687028 shares to qualified institutional buyers, 6343513 share to non-institutional investors.

Category	Shares Offered
QIB	12,687,028
NII	6,343,513
Retail	4,229,009
Total	23,259,550

As you could see the subscription in this stock is too level at almost 150 %. In the grey market, the stock premium is trading at 150 which means it could get listed around 300 or above.

Let's see in the past which shares got the subscription  of more than 150%:

Name                             Times Subscriptions      Issues price       Listed price      % Returns on listing day

Capacit'e Infraprojects            183 times               250                       399                  159.6

CDSL                                        170.1                   145-149                250                   167.7 

Ujjivan Bank                             165.60                    37                         58                   156.7

Amber Enterprises                    165                      859                      1180                   137.36

Happiest Minds                       151                     166                        217.6                 131.1

(Expected/Speculation

from my end)

Note:

Not all retailers would be allotted share some might get 1 lot, some might get a few and even some may get any shares. its purely luck. The process of allotment of shares happens on a Lottery basis.

one should not apply for multiple subscriptions for an IPO from his own Multiple Demat accounts However you can apply from each Demat accounts of members of the family.

Till the time the Allocation of the lot or share or confirmation not happens your invested amount would get blocked.