Last updated: 16 July 2026 · Reviewed by Mayank Srivastava
New to IPO investing? This glossary explains every term you’ll come across while reading a prospectus, tracking live IPO GMP, or checking subscription and allotment status — from A (Allotment) to U (Underwriting). Bookmark this page as your quick reference.
A
Allotment The process by which shares applied for in an IPO are formally assigned to successful applicants after the subscription period closes. Allotment is done on a lottery basis (retail) or proportionate basis (QIB/NII), depending on subscription levels. Check status on our IPO Allotment page.
Anchor Investor A qualified institutional buyer (mutual fund, insurance company, FII, etc.) allotted shares one day before the IPO opens to the public, at a price fixed in advance. Strong anchor participation from reputed institutions is often read as a positive signal and can influence live IPO GMP.
Anchor Lock-in The mandatory period (typically 30–90 days, split into tranches under SEBI rules) during which anchor investors cannot sell their allotted shares.
ASBA (Application Supported by Blocked Amount) The mandatory method for applying to Indian IPOs, where the application money is blocked in the investor’s own bank account (not debited) until allotment is finalised. Non-allotted amounts are simply unblocked — no physical refund needed.
Allotment Ratio The proportion in which shares are allotted to a category when oversubscription requires scaling down or lottery allocation, e.g., 1 lot allotted per X applications in the retail category.
B
Basis of Allotment The official document published by the registrar showing exactly how shares were allotted across categories (Retail, NII, QIB) — including the lottery/proportionate methodology used.
Bid An application submitted during the IPO subscription period, specifying the number of shares (in lots) and the price within the price band the investor is willing to pay.
Bid-cum-Application Form The form (physical or digital, via ASBA) used to apply for an IPO, combining the bid details and payment authorisation in one document.
Book Building The price-discovery process used in most Indian IPOs, where a price band (not a fixed price) is set, and the final issue price is determined based on demand collected during the bidding period.
Book Running Lead Manager (BRLM) The investment bank(s) or merchant banker(s) appointed by the issuing company to manage the IPO process — pricing, marketing, regulatory filings, and coordination with SEBI, exchanges, and the registrar.
Buyback When a listed company repurchases its own shares from existing shareholders, reducing the number of shares outstanding — distinct from an IPO but often tracked on the same platforms. See Upcoming Buybacks.
C
Cap Price The upper end of the IPO price band — the maximum price at which an investor can bid.
Cut-off Price An option (available only to Retail Individual Investors) to bid at the final price determined through book building, whatever that turns out to be within the band, instead of specifying an exact price.
Current GMP The most recently updated grey market premium quote for a given IPO — see the live IPO GMP table for real-time figures.
D
Delisting The removal of a company’s shares from a stock exchange, either voluntarily (company buys back all public shares) or compulsorily (regulatory non-compliance) — the reverse process of an IPO/listing.
Demat Account The electronic account (via NSDL or CDSL) in which allotted IPO shares are credited. A demat and linked trading account is mandatory to apply for any IPO in India.
DRHP (Draft Red Herring Prospectus) The preliminary offer document filed with SEBI before an IPO, containing the company’s financials, business model, risk factors, and objects of the issue — but without the final price or issue size. Publicly available on sebi.gov.in.
E
Employee Reservation A portion of the IPO specifically set aside for the company’s employees, often at a discount to the issue price.
EPS (Earnings Per Share) Net profit divided by the total number of outstanding shares — a key metric used to judge IPO valuation alongside the P/E ratio.
Escrow Account A regulated bank account where IPO application funds (in older, non-ASBA processes) or anchor investor funds are held until allotment is finalised.
Estimated Listing Price The price implied by adding the current GMP to the IPO issue price — a common (though unofficial) way retail investors estimate potential listing gains. Formula: Issue Price + GMP.
F
Face Value The nominal or “par” value of a share as stated in the company’s records (e.g., ₹1, ₹2, ₹10) — distinct from the market/issue price, which is typically much higher.
Fixed Price Issue An IPO structure (less common today) where the issue price is set in advance by the company, rather than discovered through book building.
FPO (Follow-on Public Offer) A further share issuance by a company that is already listed, as opposed to its original IPO.
Fresh Issue The portion of an IPO consisting of newly created shares, with proceeds going directly to the company — as opposed to an Offer for Sale.
G
GMP (Grey Market Premium) The unofficial premium at which IPO applications or shares trade in the grey market before official listing. See our complete explainer on the Live IPO GMP page.
Green Shoe Option A price-stabilisation mechanism allowing the issuer to sell additional shares (up to 15% of the issue) to support the stock price for a defined period after listing.
Grey Market An unofficial, unregulated over-the-counter network where IPO applications and shares are traded before the official stock exchange listing. It has no SEBI oversight, no investor protection, and no guaranteed settlement.
H
HNI (High Net-worth Individual) An investor category (also called NII) for applications between ₹2 lakh and ₹10 lakh (sNII) or above ₹10 lakh (bNII), distinct from the Retail category.
I
Investor Category The classification (Retail, NII/HNI, QIB, Anchor, Employee) under which an application is bid — each has separate reservation quotas and allotment methodologies.
IPO (Initial Public Offering) The first sale of a private company’s shares to the public, resulting in the company becoming listed on a stock exchange.
IPO Grading A now-discontinued mandatory SEBI requirement where credit rating agencies scored the fundamentals of an IPO on a scale; largely replaced by disclosure-based regulation today.
ISIN (International Securities Identification Number) The unique 12-character code assigned to every listed security, used to identify shares in demat accounts and trading systems.
Issue Price The final price at which shares are allotted to investors, determined through book building within the price band.
Issue Size The total value of shares being offered in the IPO (fresh issue + offer for sale), usually expressed in crores.
K
Kostak Rate An informal grey-market rate at which an investor sells their entire IPO application to another party for a fixed price, paid regardless of whether allotment happens. See the Kostak vs Subject to Sauda comparison on our Live GMP page.
L
Listing Date The day an IPO’s shares begin trading on the stock exchange (NSE/BSE).
Listing Gain / Loss The percentage difference between the issue price and the price at which the stock opens (or closes) on its first trading day.
Lock-in Period The mandatory period during which promoters, anchor investors, or pre-IPO shareholders cannot sell their shares after listing, as prescribed under SEBI ICDR regulations.
Lot Size The minimum number of shares an investor must bid for in one application — IPOs are only allotted in multiples of the lot size, not single shares.
M
Mainboard IPO A larger IPO listed on the main platform of the NSE or BSE, subject to stricter eligibility and disclosure norms than an SME IPO.
Market Maker An intermediary (mandatory for SME IPOs) required to provide buy/sell liquidity for the stock for a minimum period after listing.
Merchant Banker A SEBI-registered entity that manages the IPO process on behalf of the issuing company — see Book Running Lead Manager.
Minimum Subscription The minimum percentage of the issue (generally 90%) that must be subscribed for the IPO to proceed; if not met, application money must be refunded.
N
NII (Non-Institutional Investor) See HNI — investors bidding above ₹2 lakh who are not QIBs.
Net Offer The portion of the total issue size available to the public after excluding the anchor investor portion and any employee/shareholder reservation.
O
Object of the Issue The stated purpose(s) for which the IPO proceeds will be used — e.g., debt repayment, working capital, capital expenditure, general corporate purposes — disclosed in the DRHP/RHP.
OFS (Offer for Sale) The portion of an IPO where existing shareholders (promoters, PE/VC investors) sell part of their holding; proceeds go to the selling shareholders, not the company.
Oversubscription When total bids received exceed the number of shares on offer in a category, expressed as a multiple (e.g., “45x subscribed”).
P
P/E Ratio (Price-to-Earnings) Issue price divided by EPS — used to compare an IPO’s valuation against listed industry peers.
Post-Issue Paid-up Capital The company’s total paid-up share capital after the IPO shares are issued, used in per-share and valuation calculations.
Price Band The price range (floor price to cap price) within which investors can bid during book building; the final issue price is set within this band.
Promoter The individual(s) or entity(ies) who founded, control, or hold significant management stake in the company — their shareholding and lock-in are closely watched by investors.
Prospectus The final, SEBI-approved offer document (after the RHP) containing the confirmed issue price, issue size, and all statutory disclosures, filed just before listing.
Q
QIB (Qualified Institutional Buyer) Large institutional investors — mutual funds, banks, insurance companies, FPIs — that get a dedicated (usually the largest) reservation quota in book-built IPOs. Strong QIB subscription is closely watched as an institutional confidence signal.
R
Red Herring Prospectus (RHP) The updated offer document filed after the DRHP, incorporating SEBI’s comments, and containing the price band — but the exact issue price is finalised only after bidding closes.
Refund The release of blocked/unallotted application funds back to an investor’s account when full allotment isn’t received — automatic under ASBA (funds are simply unblocked).
Registrar The SEBI-registered entity (e.g., KFin Technologies, Link Intime) responsible for processing applications, running the allotment lottery, and managing refunds/credit of shares.
Retail Individual Investor (RII) An investor category for applications up to ₹2 lakh, with a dedicated reservation quota and simplified allotment via lottery.
Rights Issue An offer allowing existing shareholders of an already-listed company to buy additional shares at a discounted price, in proportion to their current holding — distinct from an IPO.
S
Shareholder Quota A reservation category in some IPOs for existing shareholders of the promoter group or a related listed company.
SME IPO An IPO by a small or medium enterprise, listed on the NSE Emerge or BSE SME platform under relaxed eligibility norms compared to mainboard IPOs, but with higher minimum lot sizes and generally higher volatility.
Statutory Advertisement The mandatory newspaper advertisement published on the day the IPO opens, summarising key issue details as required by SEBI.
Subject to Sauda (STS) An informal grey-market deal where the agreed premium is paid only if the seller actually receives allotment; if no shares are allotted, the deal is cancelled. Compare with Kostak Rate on our Live GMP page.
Subscription The total bids received in an IPO, tracked category-wise (Retail/NII/QIB) and expressed as a multiple of shares on offer.
Sweat Equity Shares issued to employees or directors as compensation for value contributed (expertise, IP, etc.) rather than cash, usually before the IPO.
Syndicate The group of brokers and sub-brokers appointed by the BRLM to collect and process bids during the IPO period.
T
T+3 Listing The current standard IPO timeline in India, where shares list on the stock exchange three working days after the issue closes (down from the earlier T+6 cycle).
U
Underwriting An arrangement where the BRLM or a syndicate member commits to buying any unsubscribed portion of the issue, guaranteeing the company receives the intended funds.
UPI Mandate The payment authorisation method (for applications up to ₹5 lakh) where investors approve a block request via their UPI app instead of using net banking-based ASBA.
V
Valuation The overall worth assigned to the company based on the issue price and post-issue share count — assessed relative to earnings (P/E), book value (P/B), and sector peers.
Related Pages
- Live IPO GMP Today → — Real-time grey market premium for all active Mainboard and SME IPOs, updated every 30 minutes.
- Upcoming Mainboard IPO
- Upcoming SME IPO
- IPO Allotment Status
- IPO GMP Calculator
Disclaimer
This glossary is provided for educational purposes only and does not constitute investment advice. Definitions reflect general Indian primary-market practice and SEBI ICDR regulations as commonly understood; always verify specific terms against the DRHP/RHP of the IPO you are evaluating and consult a SEBI-registered investment advisor before investing.