What is IPO subscription and what does it indicates?

What is IPO subscription?

In an initial public offering (IPO), investors submit an application and pledge to buy shares in the company. Investors have the opportunity to express their interest in purchasing shares of the company and the price at which they are prepared to do so during the initial public offering (IPO) subscription period. 

When investors compare the total number of shares bid for with the number of shares on sale, the subscription level or oversubscription rate is revealed. Investors are highly interested in a high subscription level, while a low level of subscription implies a lack of interest. Market sentiment can be gleaned from IPO subscriptions, which in turn can impact listing day pricing decisions and the stock's success.

What is the IPO process?

Here are the main steps in the IPO (Initial Public Offering) process:

• Appointing advisors: The company hires investment banks, legal counsel, and underwriters to help it navigate the IPO process.
• Due Diligence: Due diligence is a detailed process that verifies a company's financial records, commercial activities, and legal compliance.
• Drafting the prospectus: A complete prospectus is created, comprising full information about the firm, its finances, business plan, risk factors, and IPO terms.
• Filing with regulators: The prospectus and other essential documents are filed with the applicable regulatory authorities, such as the Securities and Exchange Board of India in India.
• Regulatory approval: The regulators analyze the filings and, if satisfied, approve the IPO to proceed.
• Marketing and roadshows: The company and its advisors perform marketing initiatives, such as investor roadshows, to increase interest and demand for the IPO shares.
• Price band determination: Based on market conditions, corporate financials, and investor demand, a price band or fixed price for the IPO shares is set.
• IPO subscription period: The IPO is open to public subscription, during which investors can submit bids or applications for shares.
• Allotment and pricing: After the subscription period has ended, shares are allocated to investors based on preset criteria, and the final IPO price is set.
• Listing and Trading: Shares of the company are listed and begin trading on the designated stock exchange(s) on the listing date.

How to check IPO subscription status?

Here are some ways to check the subscription status of an IPO (Initial Public Offering):

Stock Exchange Websites 

Visit NSE or BSE websites for real-time updates on ongoing IPO subscriptions under the 'Live IPO' or 'IPO Watch' sections.

IPO Subscription Status Details

These websites typically display the following information about the IPO subscription:

• Total subscription (in times)
• Subscription details across different investor categories (QIB, NII, Retail)
• Number of applications received
• Amount subscribed (in INR)

Registrar Websites

Check the registrar's website for specific IPO subscription details.

Brokerage Firms and Investment Portals

Many brokerage firms and investment portals offer subscription updates in their IPO sections.

Financial News Websites and Apps

Stay updated on subscription status through financial news websites and apps like Moneycontrol, Economic Times, and CNBC Awaaz.

How to check IPO allotment status?

After applying for an IPO, an investor is often curious whether their shares have been allotted. To their relief, they may easily check the IPO Allotment Status online.

• Visit the NSE or BSE website or the registrar's site.
• Select the IPO and enter your PAN card and application number.
• Check if shares have been allotted.
• Review the prospectus before applying for IPOs.

There are some ways that can increase chances of IPO allotment but make sure to do everything strategically and keep patience while applying for an IPO.

Conclusion

To sum up, IPO subscription is an important measure of investor interest in a business's initial public offering (IPO). Low registration rates may raise doubts about the offering's success, whereas high subscription levels frequently indicate significant market confidence and demand for the company's shares.

Investors can assess market mood and make wise judgments by having a solid understanding of IPO subscription levels. It is critical for both investors in initial public offerings (IPOs) and companies going public to keep a careful eye on subscription levels to evaluate the possible success of the offering.