When a private company decides to go public and offer its shares to common investors, it does so through an Initial Public Offering (IPO). After investors apply and shares are allotted, the company’s shares are listed on the stock exchanges like NSE or BSE, allowing them to be bought and sold freely.
But what exactly is IPO listing time and how does the process work on listing day? Let’s break it down in simple terms.
IPO Listing Time in India
The IPO listing time is the schedule followed on the day a company’s shares officially begin trading on the stock market. Here’s what happens on the listing day:
| Phase | Time | What Happens |
|---|---|---|
| Pre-open order session | 9:00 AM – 9:45 AM | Investors can place, modify, or cancel their buy/sell limit orders. The system calculates a fair starting price, called the Indicative Equilibrium Price (IEP). |
| Order matching | 9:45 AM – 9:55 AM | Based on the final IEP, the system finalizes the IPO listing price – the price at which the stock will begin trading. |
| Buffer session | 9:55 AM – 10:00 AM | A short 5-minute break to transition smoothly into normal trading. |
| Regular trading begins | 10:00 AM | Trading officially begins on the stock exchange with a “bell ringing” ceremony. Anyone can now buy or sell the IPO shares. |
IPO Listing Process Explained Step-by-Step
Here’s a simple explanation of how a company goes from filing for an IPO to getting listed on the exchange:
1. Hiring Experts
The company hires investment bankers, auditors, legal advisors, and registrars to help with the IPO. These experts help prepare documents, set the price, and follow SEBI rules.
2. Filing the DRHP
The company prepares a Draft Red Herring Prospectus (DRHP) and submits it to SEBI (Securities and Exchange Board of India). This document contains all details about the company, its finances, risks, and the IPO.
3. Marketing and Roadshows
After filing, the company promotes the IPO through advertisements, media, and investor meetings (called roadshows).
4. SEBI Approval
SEBI reviews the DRHP and may ask for changes. Once approved, it becomes the Red Herring Prospectus (RHP), which is shared with the public.
5. Deciding the Price
The company chooses between two pricing methods:
- Fixed Price: A set price is announced in advance.
- Book Building: Investors bid within a price range. The final price is based on demand.
6. Anchor Investor Bidding
For book-built IPOs, big investors called anchor investors are allowed to place bids one day before the IPO opens to the public.
7. IPO Opens to Public
The IPO is open for 3-5 days, during which retail investors, QIBs (Qualified Institutional Buyers), and NIIs (Non-Institutional Investors) can apply.
8. Share Allotment
Once the IPO closes, shares are allotted through a computerized lottery. If you don’t receive shares, your money is refunded within 7–10 working days.
9. Listing on the Stock Exchange
The company’s shares are listed on NSE and/or BSE, and regular trading begins on the listing day.
What Is the IPO Listing Price?
The IPO listing price is the price at which the stock starts trading on the exchange. It is based on the Indicative Equilibrium Price (IEP), which is calculated during the pre-market session.
The IEP is the price at which the highest number of buy and sell orders match. It changes constantly based on how many orders are placed, modified, or cancelled during the pre-open session.
IPO Issue Price vs Listing Price
| IPO Issue Price | IPO Listing Price |
|---|---|
| Price at which shares are offered to the public during the IPO. | Price at which shares start trading on the stock exchange. |
| Fixed or decided through bidding. | Determined by market demand and supply. |
Can You Sell IPO Shares on Listing Day?
Yes, if you received IPO shares, you can sell them on listing day after 10 AM when regular trading starts. However, some investors like promoters or anchor investors have a lock-in period and cannot sell their shares right away.
