How an IPO Works
A company going public selects an investment bank to underwrite the deal, files a prospectus with the regulator and sets a price range. During the book-building period, institutional and retail investors submit orders.
On listing day, shares begin trading on the exchange. The IPO price is fixed; after that, the market determines the price.
How to Participate in an IPO
Retail investors can apply through their brokerage platform during the subscription period, which typically lasts a few days. The requested amount is held in your account and only deducted if you receive an allocation.
If demand exceeds supply, you may receive fewer shares than requested — or none at all. Unused funds are returned promptly after the allocation.
IPO Risks
Not all IPOs are winners. Shares can fall below the IPO price and stay there for extended periods. The excitement around a listing does not guarantee strong long-term performance.
Always read the prospectus: understand the company's business model, revenue trajectory, debt levels and how it plans to use the proceeds.