An Initial Public Offer (IPO) is a means of collecting money from the public by a company for the first time in the market to fund its projects. In return, the company gives the share to the investors in the company.

In an IPO, the Lead managers decide the price of the issue. In a book building offer, the syndicate members decide the indicative price range and the investors decide the price of the issue through a tender method.

A draft prospectus provides the information on the financials of the company, promoters, background, tentative issue price etc. It is filed by the Lead Managers with the Securities & Exchange Board of India (SEBI) to provide issue details. Overview of the draft prospectus can be seen on www.sebi.gov.in (SEBI's web site). The final prospectus is printed after obtaining the clearance from SEBI and the Registrar of Companies (ROC).

This differs from issue to issue. In a normal issue, the Lead managers decide the value and this would be notified on the form. In a book building issue, a price range is declared and the investors who quote higher value would be allotted. In Highlights page of any IPO these issues are explained in detail.

When you go through the executive summary of an IPO, our research team provides its opinion on the issue based on an analysis of the company's financials, promoters' background and other qualitative issues. This can help in guiding your investment decision.

For a public issue, you can know the status by calling the registrar (you will know about the registrar on the Highlights Page of the issue) after 30 to 40 days from the closing date of the issue. However, in a book building issue, you can know the status by calling the registrar after 20 days from the closing date.

Please bear in mind that in a book building exercise the final price is decided based on at what price the maximum demand can be generated for the issue. Your quoting a price above the band "will not" in any way improve your chances of getting an allotment.

Ultimately you will be allotted the shares only at the price decided by the company based on the bids received. Also note that if you quote a price below the band then you will get the last priority for allotment and that too at the discretion of the company.

Please visit our New Listings page on the IPO Home . We are currently covering stocks listing on the BSE and very soon will be expanding it to include regional stock exchanges too.