IPO
Market basicsInitial Public Offering — the first sale of a company’s shares to the public, after which it becomes listed.
In plain terms
The only moment your money actually reaches the company. Everything after is second-hand trading.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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ASBA
Market basicsAlso called: Applications Supported by Blocked Amount
Applications Supported by Blocked Amount — the mechanism by which IPO application money is frozen in the applicant's own bank account instead of being transferred to the issuer.
In plain terms
You never send money anywhere. On allotment the block becomes a debit; without allotment it simply lifts, and all you gave up was the ability to spend that amount for a week.
DRHP
Regulation & taxAlso called: Offer document
Draft Red Herring Prospectus — the offer document filed before an IPO.
In plain terms
Free, hundreds of pages, and it contains a legally mandated list of everything that could go wrong.
Fresh issue
Market basicsNew shares issued in an IPO, with proceeds going to the company.
In plain terms
Money enters the business. Contrast with an offer for sale, where it goes to existing holders.
Grey market premium
Market basicsAlso called: GMP
An unofficial price quoted for an IPO share before listing, in an unregulated market that has no legal standing.
In plain terms
No exchange, no reporting requirement, no audit trail, and nobody accountable for the number — which can be moved by the very people who benefit from a heavily subscribed issue. A sentiment reading, and it has been wrong spectacularly.
Oversubscription
Market basicsAn IPO receiving applications for more shares than are on offer, reported as a multiple of the issue size.
In plain terms
Read it by category, never by the headline. QIB demand is the informative number, and a large multiple on a small issue is easy to generate while saying almost nothing about the business.
UPI mandate
Market basicsThe UPI approval that blocks the application money in your own bank account for an IPO, which must be authorised before the deadline.
In plain terms
The single most common reason applications are rejected, and entirely avoidable. The notification arrives in the UPI app and quietly expires while you are doing something else.
NSE Emerge
Market basicsThe NSE's platform for small and medium enterprises, where a listing is vetted by the exchange rather than reviewed by SEBI directly.
In plain terms
An IPO in name and in reporting, under materially different rules. Analyst coverage is minimal, so promoter quality carries more weight here than anywhere else.