The IPO Glossary.
IPO terms, explained simply.

The distribution of shares to successful applicants once the IPO closes. When an issue is oversubscribed, shares are allotted on a proportionate or lottery basis as set out in the offer document.

A Qualified Institutional Buyer that subscribes to part of the issue a day before it opens to the public. Anchor participation signals institutional demand, but it is not a guarantee of listing gains.

Application Supported by Blocked Amount. The investor's bank blocks the application money instead of debiting it, and only the amount for shares actually allotted is taken.

A board committee, mostly of independent directors, that oversees financial reporting, internal audit and related-party transactions of a listed company.

The final allocation method approved with the stock exchange after an issue closes, showing how many shares each investor category receives.

A price-discovery process in which investors bid within a price band, and the final issue price is fixed on the basis of the demand received.

The platform of BSE dedicated to listing small and medium enterprises, with simpler listing conditions than the Main Board.

The system of board oversight, committees, policies and disclosures that keeps a company accountable to its shareholders.

The final price at which shares are allotted in a book-built issue. Retail investors can bid at the cut-off price instead of a specific price.

Conversion of physical share certificates into electronic form held with a depository. All shares must be in demat form before an IPO.

Draft Red Herring Prospectus. The first offer document filed with SEBI and the stock exchanges, describing the business, financials, promoters, risks and the proposed issue.

A detailed review of a company's financial, legal, corporate and operational records to confirm that everything disclosed in the offer document is accurate and supported.

The minimum conditions under SEBI ICDR Regulations and exchange rules, such as net worth, net tangible assets, profitability and paid-up capital, that a company must meet to file for an IPO.

The reduction in existing shareholders' percentage ownership when a company issues new shares.

A further public issue of shares by a company that is already listed, used to raise additional capital or to let existing shareholders sell.

New shares issued by the company in an IPO. The money raised goes to the company for the objects of the issue.

An unofficial indicator of the premium at which IPO shares trade informally before listing. GMP is not regulated and is not a guaranteed listing price.

High Net-worth Individual. An investor applying for more than ₹2 lakh in an IPO, in the Non-Institutional Investor category.

The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The main rules for public issues, covering eligibility, disclosures, pricing and allotment.

A non-executive director with no material relationship with the company or promoters, appointed to bring objective oversight to the board.

Dealing in a listed company's securities while in possession of unpublished price-sensitive information. It is prohibited under SEBI's insider-trading regulations.

The price at which shares are offered and allotted to investors in a public issue.

The total amount a company raises in an IPO, including the fresh issue and any offer for sale.

Key Managerial Personnel, such as the CEO, managing director, CFO and company secretary, whose details are disclosed in the offer document.

Admission of a company's shares to trading on a recognised stock exchange after the IPO.

The difference between the issue price and the price at which the share opens or closes on its first trading day.

A period during which certain shareholders, such as promoters and anchor investors, cannot sell their shares after listing.

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which set the ongoing disclosure and governance duties of listed companies.

The minimum number of shares an investor must apply for, and the multiples in which further bids are made.

An IPO in which shares list on the Main Board of NSE or BSE. Also called a Mainline IPO, it has stricter eligibility norms than an SME IPO.

An intermediary that provides two-way buy and sell quotes in an SME-listed share to support liquidity after listing.

A SEBI-registered intermediary that manages a public issue. It prepares the offer document, runs due diligence and handles the issue process. Also called the Book Running Lead Manager.

The move of an SME-listed company to the Main Board once it meets the Main Board eligibility conditions.

The minimum share of post-issue capital, generally 20%, that promoters must hold and keep locked in after an IPO.

Total assets less intangible assets and liabilities. One of the financial tests for Main Board eligibility.

Paid-up capital plus reserves and surplus, less accumulated losses. Minimum net worth is part of the eligibility criteria.

Non-Institutional Investor. Individuals and entities, other than QIBs and retail investors, who apply for more than ₹2 lakh.

The platform of the National Stock Exchange for listing small and medium enterprises.

The section of the offer document that explains how the company will use the money raised.

Sale of existing shares by promoters or shareholders as part of an IPO. The proceeds go to the selling shareholders, not the company.

When investors apply for more shares than are on offer. It is shown as a multiple of the shares available in each category.

The share capital actually paid by shareholders. Post-issue paid-up capital decides whether a company lists on the SME platform or the Main Board.

Shares issued privately to investors before the IPO, usually to institutional investors, family offices or HNIs.

The range within which investors can bid in a book-built issue, announced before the issue opens.

The person or group in control of the company, named as promoter in the offer document and responsible for the minimum promoters' contribution.

The final offer document filed with the Registrar of Companies after the issue price is fixed.

Qualified Institutional Buyer. Institutions such as mutual funds, banks, insurers and foreign portfolio investors that meet SEBI's criteria.

The offer document filed before the issue opens. It contains all details except the final price and number of shares.

The SEBI-registered intermediary that processes applications, finalises the basis of allotment and credits shares to investors.

Historical financial statements restated in line with current accounting policies and SEBI requirements for inclusion in the offer document.

An individual who applies for shares worth up to ₹2 lakh in an IPO.

The section of the offer document that sets out risks related to the business, industry, financials and the issue.

The Securities and Exchange Board of India, which regulates the securities markets, including public issues and listed companies.

An IPO by a small or medium enterprise that lists on BSE SME or NSE Emerge, with simpler listing conditions than the Main Board.

The process of investors applying for shares during the issue period. Subscription figures are reported for each investor category.

The timeline under which shares are listed on the third working day after the issue closes.

The method that lets investors block IPO application money through a UPI ID linked to their bank account.

How the company plans to spend the IPO money, for example on capital expenditure, working capital or repaying debt.

An estimate of a company's worth, using methods such as discounted cash flow, market comparables and asset-based valuation, that guides IPO pricing.

Current assets less current liabilities, the money a business needs to run day to day. Often one of the objects of an SME IPO.