November 11, 2025
8 mins read
An initial public offering or IPO is the way by which a private company raises funds by issuing shares on the stock exchange for the first time. Since these IPOs offer an early entry into a reputed company, their value in the Indian market has gained wide popularity.
If you are interested in diversifying your investment portfolio by investing in IPO shares then this article takes you through all the details of IP, including the allotment process, strategies, IPO bidding, etc.
An Initial Public Offering (IPO) is when a private company sells its shares to the public on a stock exchange for the first time. This is how the company gets money. It gives investors a chance to buy shares in well-known companies before they are generally available on the stock market. IPOs have become increasingly popular in India over the past few years, as they offer investors the opportunity to diversify their investments.
If you want to buy shares in an IPO, you need to know what an IPO subscription is. This tutorial gives a full picture of the IPO process, how to subscribe, how to check allotment status, tips for successful subscription, and how to check the status of your subscription and allotment.
When a firm submits its draft prospectus, known as the Red Herring Prospectus (RHP), and makes the offering public, the IPO subscription process begins. You can only subscribe to an IPO for a short time, usually between three and 10 days.
Brokers, internet trading platforms, and offline applications sent to banks or brokers are some of the ways that investors can sign up for an IPO. When investors apply, they specify the number of shares they want and the maximum price they are willing to pay within the given price range.
The number of times investors have applied for a company's shares is shown by IPO subscription statistics. This information is a good way to tell how investors feel about a firm and how many people might want to buy its shares.
Investors often look at IPO subscription statistics to:
Check Market Demand: A heavily subscribed IPO means that there is a lot of interest in the firm, which means that investors are confident about its future. Low subscription levels could mean that investors don't have much faith in the market.
Check the Price: Investors can figure out if the IPO price is fair based on the number of subscriptions and the perceived demand. If an IPO is oversubscribed, it could mean that the stock is undervalued. If it is undersubscribed, it could mean that the stock is overvalued.
Predict Possible Listing Gains: After an IPO, prices often go up when there are a lot of people who want to buy shares. Subscription data might provide you a hint about how the stock might do on the day it goes public.
Investors may make smart choices, lower their risk, and get the most out of their investments by keeping an eye on IPO subscription statistics.
Before selling shares to the general public, companies must follow a well-defined IPO process. The most significant stages in the IPO process include:
Preparation: Companies initiate IPOs to raise capital for growth, new projects, or debt repayments.
Draft Red Herring Prospectus (DRHP): Companies file a DRHP with the SEC, which contains a significant amount of information about the company, including financial statements, business strategies, risks, and management backgrounds. The SEC must review and approve the DRHP before proceeding with the public offering of shares.
Stock Exchange Selection: Companies select the exchange (NSE or BSE) they want to list their shares on.
Road Show: The company will be marketing their business model, growth opportunities, and projected potential to encourage an interest in investing for their IPO.
Pricing: The final issue price is determined by market reaction and specifically demand and interest from investors.
Allocation: Investors receive shares based on lots of factors, including subscription statistics, allotment rules, and lottery systems if there are too many subscriptions.
Listing: The company's shares are now live on the stock exchange.
Trading Begins: Investors can now buy and sell shares on the exchange.
Lock-in Period: Certain shares, particularly those held by company promoters and insiders, may have restrictions that prohibit them from being sold for a designated time period.
Stabilisation Period: Immediately after an IPO, a company may, at the request of the underwriters, take additional actions in the market to stabilise the share price.
This process ensures that the whole process is open and fair, reducing the tension for both sides, the company trying to raise money and the investor wanting to feel secure in their investment.
To participate in an IPO subscription, you must follow the bidding process properly.
Get a demat and trading account with a broker you trust.
Have a PAN card that is still valid.
Log in to your trading account and go to the IPO page.
Choose the IPO you want to apply for and tell them how many lots you want and how much you want to bid.
You can pay with the associated bank account or UPI.
Send in the application and wait for an answer.
Get the IPO application form from your bank or broker.
Fill out the needed information, attach the required documents, and send a cheque for the bid amount.
Before the deadline, give the form to the bank or broker.
IPOs are open for three to ten days.
You can send in applications online from 10 AM to 5 PM on the stock exchanges.
Offline applications are only accepted during the hours that banks or brokers are open.
Brokers or banks have different last-day deadlines.
Knowing the timing makes sure that investors don't miss the chance to apply.
IPO subscription levels show how interested investors are in the shares being offered:
An IPO that is oversubscribed means that there are more people who want to buy shares than there are shares available. When an IPO is oversubscribed, it usually means that investors have a lot of faith in the market, and the stock price goes up a lot.
Under-Subscribed IPO: There aren't enough people who want the shares that are being offered, which means that the market isn't as interested, and investors are more cautious.
The form of subscription is quite important to investors when they decide whether or not to apply.
The listing price of the IPO is directly affected by the subscription level:
Most of the time, when an IPO is oversubscribed, the market is happy with it, and the listing gains are bigger.
IPOs that don't get enough interest may have less demand and may trade below the issue price at first.
Other things that affect the price of a listing are:
How the market feels and how confident investors are
The company's chances of growth and its financial health
GMP, or grey market premium
Changes in the law or economic reasons that are unique to the industry
Some IPO shares are exchanged in the grey market, which is not legitimate and not on the stock market. The Grey Market Premium (GMP) is the extra money that people are willing to pay for these shares.
GMP shows how much more investors are prepared to pay than the IPO price. It is often a sign of possible listing gains in the future.
The following points will help you achieve a successful subscription to an IPO:
Do your homework! Look deeper than just the marketing or roadshow! Understand the basics of the company, its financial position, the price of its IPO, the number of subscriptions and any trends in the industry that it operates in.
Looking for strong demand: pay attention to the number of subscriptions to the IPO and good GMP. These things are an indication that the stock will perform better than other stocks after trading ceases in the market.
Understand how to apply: familiarise yourself with the online or offline ways (evening nemophila for some) to apply for the IPO so you can see the application as part of a process.
Diversify: Be sure to invest in more than one IPO or sector to reduce risk and diversify your investment portfolio.
Stay Informed After Allotment: Keep an eye on market trends and company news even after you have your shares so you can make smart choices about whether to keep or sell them.
Go to the NSE or BSE website.
Go to Market Data and then New Public Issues.
Pick the IPO that interests you.
To see the status of your subscription, click on Bid Details.
1. Log into your brokerage trading platform.
2. Click on the Order Book link in the IPO module.
3. The status of the allotment will either be:
• Allotted; you received your full allocation
• Partially Allotted; you received a partial allotment
• No Allotment; for you, there was no allotment..
Prior to investing, it is important to understand what an IPO subscription is. Investors can utilise IPO subscription data, market demand and the grey market premium to help determine where to invest; nevertheless, it is always best to make choices based on due diligence, the fundamental aspects of the company, and your investment objectives.
A well-planned IPO subscription strategy and intelligent portfolio diversification with timely applications will help give you a better chance of receiving your allotment and ultimately producing long-term profits. Investors can benefit from IPOs while minimising risks with disciplined investing and being informed.
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IPO subscription rate represents the number of times shares under an IPO have been subscribed. For instance, if there is three times oversubscription, it means that the demand for company shares is three times than what it was planning to offer.
IPO subscription primarily is the process where investors apply for an IPO by making a bid within the specified price range provided by the company. The IPO subscription process is crucial in determining whether investors will get an allotment or not. Now depending on the IPO subscription rate, shares are accordingly allotted.
If an IPO is fully subscribed, it simply means that all the shares under an IPO have been purchased by investors,thus indicating a positive market sentiment for the IPO shares.
A good subscription rate in an IPO is considered when the demand for the IPO shares exceeds the availability of shares.
In an IPO, "subscription" refers to the process where investors place bids to purchase shares of a company going public. The subscription period defines the specific timeframe during which these bids can be submitted.
QIBs bring credibility and confidence to IPOs, often influencing retail sentiment. High QIB demand signals institutional trust. NIIs increase overall subscription volumes. RIIs represent public interest, and their oversubscription suggests widespread demand. Together, their participation helps price discovery and shapes the IPO’s final subscription status.
After applying, investors await allotment. If allotted, shares are credited to the demat account before listing. If not, the application money is refunded. Once listed, shares can be traded on exchanges. Listing gains or losses depend on market demand, company outlook, and overall IPO performance.
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