Frequently Asked Questions on IPOs
SEBI Guidelines defines Book Building as a process undertaken by which a demand for the securities proposed to be issued by a corporate body is elicited and built up and the price for such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document.
Price at which securities will be allotted is not known in case of offer of shares through book building while in case of offer of shares through normal public issue, price is known in advance to investor. In case of Book Building, the demand can be known everyday as the book is built. But in case of the public issue the demand is known at the close of the issue.
Book should remain open for minimum of 3 working days.
"SEBI ICDR Regulation 2018 – 46 & 266” (Issue of Capital and Disclosure Requirements) provides a IPO Subscription Period during which the bids shall be accepted by the bidding system. Any blocking of funds towards IPO as per the applicable circular prior to the subscription period shall not be permitted . All members are advised to adhere to the same and other guidelines issued by SEBI/ NSE time to time.
No. As per SEBI, only electronically linked transparent facility is allowed to be used in case of book building.
Floor price is the minimum price at which bids can be made.
The member has to submit a one-time undertaking in prescribed format to the membership department. Members have to make the request in prescribed format giving details of the user ids along with the VSAT numbers.
Book Running Lead Manager appointed by the issuer will intimate to the exchange the list of members who are eligible to participate in the issue. These members will be allowed to enter the bids in the IPO.
The members have to copy the NTIPOTDR.EXE file in root directory and then inflate the file by using command NTIPOTDR -D -O. The above executable file is available in extranet under common/ipo directory.
Whenever a bid is entered by trading members in to the system, a unique transaction registration slip is automatically generated. Transaction registration slip gives details regarding number of shares bid for, price, the client name etc.
No. The system automatically rejects the bids if price is less than floor price.
Margin amount is a compulsory numeric field. However if member collects no margin amount then he has to enter 0 in margin amount field.
Yes. Corporate Manager of each member can set up order limits for all the dealers under him.
User will see the bid details for all the issues. However, he is able to enter bids only for those issues for which he has been appointed as member by Book Running Lead Manager.
No. However the Syndicate Members can see the orders entered by members who are activated under him, by downloading EOD report.
Syndicate members cannot cancel or modify the bids entered by other members.
Syndicate Member (SM) will get a report download of his own orders as well as of all other members who are activated under him.
The environment for Capital Market Segment and IPO book building segment are different. It is a matter of convenience, that User Ids available in the Capital Market Segment are used in IPO book building segment. Hence, any change in either of the Market segment will not affect the other market.