Basic questions about IPO

  1. Circuit on stock market listing day

I read that there is no circuit between 9-9:45 AM. After that, there are circuits introduced. Circuit will be 5% (if IPO < 250 Crore), otherwise 20%. Can anyone confirm?

  1. How is listing price determined.

I heard it’s not same as cut-off price? Is it determined by company, or by traders during pre-market (using same process which is used to determine opening price of all the regular stocks)? What is the process?

  1. Suppose someone applied for IPO at 950 but cut-off price is 940.

Do they get allotment at 940 or 950?

  1. What is NSE bid details vs consildated bid details? What IPO have to do with NSE/BSE?

https://www.nseindia.com/market-data/issue-information?symbol=LICI&series=EQ&type=Active

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There is no circuit limit for price discovery, generally during pre-market session exchange has 20% price band applicable either side.

Once the stock starts trading after price discovery period is over on listing day, for issues where size is more than Rs. 250 crores, Circuit Limit of 20% will be applicable from equilibrium price and for issues with size lesser than Rs. 250 crores, Circuit Limit of 5% will be applicable from equilibrium price.

You can refer to this SEBI document for more information.

Exchange conducts pre-open session in listing day from 9 AM till 9:45 AM, this is similar to pre-open we see every trading day from 9 AM till 9:08 AM.

Depending on demand and supply in the pre-open session the listing price will be determined.

In this case you will get allotment at Rs. 940.

All the applications are collected by the exchange, both NSE and BSE.

NSE Bid Details: Is details of bids received on NSE.

Consolidated Bid Details: This are details of bid received on both NSE and BSE.

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Hi @ShubhS9

Thank you again for your answers. Just have a follow-up question.

All the applications are collected by the exchange, both NSE and BSE.

When I applied, I didn’t choose NSE or BSE. Where is my application? Who decide the exchange for the IPO bids?

Exchange conducts pre-open session in listing day from 9 AM till 9:45 AM

So 9-9:45 AM is book building period and no orders will be filled during it? Order will be filled at 9:45 AM?

There is no circuit limit for price discovery, generally during pre-market session exchange has 20% price band applicable either side.

I assume 9-9:45 is price discovery period. Which period is pre-market session in IPO? How is pre-market session different from discovery period?

Also one more question about propertionate allotment. Supposed IPO got subcribed 5x times. If I invested 10L, I assume I will get share worth 2L (20%). In such cases, I can just invest 50L (theortically) if I want share worth 10L?

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The exchange you submit bids on doesn’t make any difference. We place bids on NSE.

Orders will be collected from 9 AM till 9:45 AM. While order matching will be done post this from 9:45 AM till 9:55 AM. You can check out more details on NSE website.

Both are the same just different ways to say it. As I explained above this session held on listing day from 9 AM till 9:45 AM is the same as the pre-market session held every day. The purpose is to determine the opening price, for stock listing, it happens to be the listing price.

This post explains the proportionate allotment methodology in detail:

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