November 25, 2025
4 mins read
If you have ever looked at a company on the stock exchange and wondered, “How did they get here?”, the answer often begins with an IPO.
An IPO — short for Initial Public Offering — is simply when a private company invites people to invest in its shares for the very first time. It’s the point where a company steps into the public market.
As a retail investor, it is particularly important to understand Mainboard IPOs. Generally, these IPOs are from larger, established companies that are commonly referred to and are often the first IPO experience for many investors.
If you’re trying to make sense of how companies raise money or how you can participate in their growth from the very beginning, Mainboard IPOs are a good place to start.
Let's simplify this. A vast majority of private companies in India often turn to founders, promoters, or private investors when looking for money. That's a small pool. When these companies need to raise capital to expand, innovate, or grow, they need to draw from a bigger pool - the public.
For companies to go public, they have to list their shares on a stock exchange, allowing anyone to invest and own a piece of the company.
A Mainboard IPO is the route big, well-established companies use to do this. To even qualify, a company must show an average operating profit of at least Rs. 15 crore for the last three years.
That rule is important for you because it means only financially strong businesses can bring a Mainboard IPO. It’s their way of proving they’re ready for the public stage — and your money.
If you're interested in what the process of going public looks like for a company, here’s an overview of the steps taken. Going public is not a decision that takes flight immediately — it’s the result of a well-thought-out, multi-step process.
The process begins as the company looks to hire a team of advisers and underwriters. These advisers engage in conversations to decide on the share price, structure the offer, and ensure compliance with relevant market regulations.
The next step is to file a Draft Red Herring Prospectus (DRHP) with SEBI. The DRHP is important to you — it sets out the history of the company and its business model, what the company makes a profit from, risks associated with the company, and how the company intends to utilise the newly raised funds.
Once the firm has been pre-approved by SEBI, the firm will file the final version of the Draft Red Herring Prospectus (RHP) with finalised details of when the IPO will take place and the anticipated price band.
Typically, the IPO will remain open for a maximum of 3-to-5 days. After the time frame has passed, a shareholder will receive allotment shares if they successfully bought shares. Once allotment has been received, the shares will then be transferred to the exchange for trading for any broker or trading platform access.
If you wish to participate in a Mainboard IPO, here's what you should know:
Only large companies that have achieved at least ₹15 crore of average profit in the previous three years can issue them.
Investment banks and underwriters help determine the share price and structure the offer.
A Draft Red Herring Prospectus (DRHP) is filed with the Securities and Exchange Board of India (SEBI) with all the details pertaining to the IPO.
Once SEBI approves the DRHP, the Red Herring Prospectus (RHP) is issued with the final details.
IPOs will be opened for applications for a period of 3–5 days.
A minimum of 25% shares are reserved for you, as a retail investor.
IPOs can be fixed price issues or book-built issues (with a price range).
Those are the basics you should understand before applying for any Mainboard IPO.
From your perspective as an investor, here’s how the IPO process unfolds step by step.
Initially, the organisation consults advisors and underwriters. Their role involves pricing, documentation, and compliance.
Subsequently, the company has to file its Draft Red Herring Prospectus with SEBI. This is an important document for you — and you should read it before investing. Once regulatory approval has been obtained, the company will release the final version (the Red Herring Prospectus, or RHP) to investors.
Companies frequently market their IPO through a variety of media such as advertisements, media interviews, and roadshows. This is an important part of the overall offering process, which helps investors better understand the business and their willingness to participate in the IPO.
When the IPO opens, you will submit an application. If shares are allotted to you, they settle into your demat account after listing, and you would trade them like any publicly traded stock.
The proceeds of the offering (which should be no less than Rs. 10 crore) are usually earmarked for research, company expansion, marketing, or paying down debt.
Feature | Mainboard IPO | SME IPO |
Company size | Large, established companies | Small and medium enterprises |
Profit requirement | ₹15 crore average over 3 years | ₹3 crore average over 3 years |
Minimum capital raised | ₹10 crore | ₹1 crore |
Exchange listing | NSE and BSE main boards | SME platforms (NSE Emerge, BSE SME) |
Investor base | Institutional and retail | Primarily retail |
Compliance | Higher, stricter regulations | Relatively simpler compliance |
This comparison matters because it helps you choose the right type of IPO based on your investment goals and risk comfort.
Additional Read: Mainboard IPO vs SME IPO
For many retail investors like you, Mainboard IPOs are often on your radar for good reason. They come with many practical benefits that target your financial needs. Simply put, you can get in early on a company about to hit the public marketplace.
Well-known companies will often utilise the proceeds of an IPO to strengthen their underlying business, which may lead to longer-term growth.
Once a company has completed its IPO, the shares start to trade on the exchanges, so there is liquidity if you need liquidity.
Additionally, IPO shares tend to be available for a quick sell, should you want to exit your position.
Mainboard IPOs allocate 25% of their shares for retail investors, which means there is a greater chance of receiving an allotment.
All of these factors will make investing in IPOs of this type appealing as a market entry point to investing in large businesses that can sustain themselves.
You should know, however, that investing in an IPO also carries risks, and knowing them will make it easier for you to position yourself with the opportunity.
Share prices can be volatile after a listing, and you will not know where they are going.
Price discovery can often be uncertain for a stock that is newly listed, and this could lead to losses.
Some companies you might want to invest in have limited historical data, making it an even more difficult research process for you.
There may be a lock-in period that prevents you from selling your shares right away.
Knowing the IPO risk allows you to plan your investment strategy with more certainty.
A Mainboard IPO is how a large private company opens its doors to investors like you. It’s the bridge between private ownership and public participation — and your chance to own a piece of a growing business.
Only companies with strong financials — at least Rs. 15 crore in annual operating profit over three years — are eligible. Once listed, the shares become part of the stock market, offering you liquidity and flexibility.
But remember, while Mainboard IPOs can add variety to your portfolio, they’re not without risks. If you understand how they work and approach them with patience, they can become a useful part of your investing journey.
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A Mainboard IPO helps a well-established private company to go public. Only large corporations with an average operating profit of ₹15 crore, every year, in the past three years can take out a Mainboard IPO. Mainboard IPOs are solely for large corporations.
Only large corporations with an average operating profit of ₹15 crore, every year, in the past three years can take out a Mainboard IPO. Mainboard IPOs are solely for large corporations.
A company wishing to take out a Mainboard IPO has first to appoint advisors for the planning process. Such advisors also include underwriters who help with the share pricing. Underwriters are also involved in helping the company file its DRHP with SEBI. Once this DRHP is approved, the final RHP is prepared. To promote the IPO, the company can also take out various forms of promotions like advertisements, roadshows, etc.
A Mainboard IPO helps retail investors become one of the very first public investors in a well-established organisation and thus the chances of capital appreciation are high. With the increase in the company’s market cap, investors will get high returns on shares. IPO investments can easily be liquified and retail investors have a higher chance of getting a Mainboard IPO allotment as 25% of IPO shares are reserved for them.
The Mainboard IPO is very susceptible to price volatility because of which investors could experience losses. Some companies might also lack historical data, thus not helping investors make an informed decision. IPOs also might have a lock-up period prohibiting investors from selling IPO shares during a particular time frame, as defined by the company
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