Chapter 5: IPO & Primary Market
📋
Day 26: IPO Process — DRHP to Listing Day
The 6-12 month marathon before a company can say 'we're listed!'
2 min read
📖 Robert Discovers the Process
Robert thought an IPO would take three weeks. His investment banker — from a very reputable Mumbai firm — pulled up a chair and said: "Robert, this will take 6–12 months, involve dozens of professionals, and cost several crores in fees before you raise a single rupee."
Robert stared in disbelief.
"That's... a lot," Robert said.
"You're asking millions of strangers to trust you with their savings," said the banker. "The process exists to make sure you deserve that trust." 📋
Robert thought an IPO would take three weeks. His investment banker — from a very reputable Mumbai firm — pulled up a chair and said: "Robert, this will take 6–12 months, involve dozens of professionals, and cost several crores in fees before you raise a single rupee."
Robert stared in disbelief.
"That's... a lot," Robert said.
"You're asking millions of strangers to trust you with their savings," said the banker. "The process exists to make sure you deserve that trust." 📋
The IPO Journey — Step by Step
1
Appoint Merchant Bankers (Book Running Lead Managers)
Kotak, Axis, ICICI, Goldman Sachs — they manage the entire IPO process. Valuation, documentation, SEBI filing, investor roadshow.
Kotak, Axis, ICICI, Goldman Sachs — they manage the entire IPO process. Valuation, documentation, SEBI filing, investor roadshow.
2
File DRHP with SEBI
Draft Red Herring Prospectus — the company's complete disclosure document. Financials, risks, business model, promoter background, use of funds. Everything. Hundreds of pages.
Draft Red Herring Prospectus — the company's complete disclosure document. Financials, risks, business model, promoter background, use of funds. Everything. Hundreds of pages.
3
SEBI Review (30–75 days)
SEBI reads, asks pointed questions, and issues observations. Company must respond and revise. SEBI's job: ensure investors have all information needed to make informed decisions.
SEBI reads, asks pointed questions, and issues observations. Company must respond and revise. SEBI's job: ensure investors have all information needed to make informed decisions.
4
Price Band Announcement
e.g., ₹420–₹440 per share. Investors bid within this band. The lower price is the "floor," upper price is the "cap." Most retail investors bid at the cap for best allotment chances.
e.g., ₹420–₹440 per share. Investors bid within this band. The lower price is the "floor," upper price is the "cap." Most retail investors bid at the cap for best allotment chances.
5
Investor Roadshow
CEO and CFO tour Mumbai, Delhi, London, Singapore — pitching the company to institutional investors. Think of it as the most expensive PowerPoint presentation in the world.
CEO and CFO tour Mumbai, Delhi, London, Singapore — pitching the company to institutional investors. Think of it as the most expensive PowerPoint presentation in the world.
6
3-Day Subscription Window
The IPO opens. Retail investors apply through broker apps. You can apply from your phone in 3 minutes. Minimum one lot (₹14,000–₹15,000 typically).
The IPO opens. Retail investors apply through broker apps. You can apply from your phone in 3 minutes. Minimum one lot (₹14,000–₹15,000 typically).
7
Allotment & Listing!
If oversubscribed, shares allocated by lottery. Exchange listing follows ~6 days after subscription closes. The opening price on listing day = the moment of truth.
If oversubscribed, shares allocated by lottery. Exchange listing follows ~6 days after subscription closes. The opening price on listing day = the moment of truth.
Subscription Categories
| Category | Quota | Who |
|---|---|---|
| QIB (Qualified Institutional Buyers) | 50% | Mutual funds, insurance companies, FIIs |
| NII/HNI (Non-Institutional) | 15% | Individuals applying ₹2 lakh+ |
| Retail Individual Investors | 35% | You — applying up to ₹2 lakh |
🎯 Today's Takeaway:
IPO takes 6–12 months. DRHP = company's full disclosure "bible." SEBI reviews everything. 3-day subscription window — apply via your broker app. Retail quota = 35%. Apply at cut-off price for best allotment chances. Tomorrow: How to actually apply for an IPO!
IPO takes 6–12 months. DRHP = company's full disclosure "bible." SEBI reviews everything. 3-day subscription window — apply via your broker app. Retail quota = 35%. Apply at cut-off price for best allotment chances. Tomorrow: How to actually apply for an IPO!