IPO glossary

Allotment

The process of deciding which applicants receive shares when an IPO is oversubscribed. For retail, it is usually a lottery of one lot per winning application.

Anchor investors

Large institutional investors who are allotted shares a day before the IPO opens, with a lock-in period.

ASBA

Application Supported by Blocked Amount. Your bank blocks the application money instead of debiting it, until allotment is final.

Basis of allotment

The registrar's document that explains how shares were allotted across investor categories.

Cut-off price

The option to bid at whatever final price is set within the price band. Available to retail applicants.

DRHP / RHP

Draft Red Herring Prospectus and Red Herring Prospectus: the offer documents filed with SEBI and the exchanges.

Estimated listing price

Upper price band plus the GMP estimate. What the grey market implies, not a forecast by the exchange.

GMP

Grey market premium: the unofficial premium over the issue price at which an IPO trades before listing.

Issue price

The final price at which shares are allotted, usually the upper end of the price band.

Kostak

A grey-market amount paid for an IPO application regardless of whether it gets shares.

Listing price

The first price at which the share trades on listing day. We use the official NSE opening price where available.

Lot size

The minimum number of shares in one application, and the unit in which more can be applied for.

Mainboard

IPOs listing on the main NSE and BSE platforms, as opposed to the SME platforms.

NII / HNI

Non-institutional investors: individuals and entities applying for more than ₹2 lakh.

OFS

Offer for sale: existing shareholders selling their shares in the IPO. The company receives no money from this part.

Price band

The range within which bids are accepted, set before the IPO opens.

QIB

Qualified institutional buyers: mutual funds, insurers, banks and similar institutions.

Registrar

The agency that processes applications and allotment, and where allotment status can be checked.

SME IPO

An IPO on NSE Emerge or BSE SME, the platforms for smaller companies, usually with large minimum lots.

Subject-to-Sauda

A grey-market amount paid for an IPO application only if it receives shares.

Subscription

How many times the shares on offer were bid for, overall and by investor category.

UPI mandate

The request you approve in your UPI app to block application money for an IPO bid.