After IPO when the stock is listed in the exchange, how the listing price will be determined.
The listing price (usually a price band) is decided by the company itself based on their perception of what the price should be. The price is arrived after doing a valuation of the company.
However after listing the price at which it will trade depends on the demand supply of the stock.
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Isn’t what the company decides(the price band) the issue price? Listing price is the first price that is recorded on the exchanges, which is completely based on demand and supply ?
Hmm…tricky, I guess issue price and listing are used interchangeably in the day to day conversation. But ya, Issue price is the right term I guess.
Thank you Karthik and Nithin. I was looking for listing price, I was assuming it will be decided by company or exchange… now its clear that it is based on demand and supply on the listing day. May be on pre-market price discovery will take place.