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In India, the Initial Public Offering (IPO) listing follows a structured schedule that differs slightly from regular market hours. The process begins with a pre-open session in the morning, during which orders are collected, and the opening price is discovered.
Actual trading starts later, once the price is finalised and the market moves into the regular trading session. Understanding the IPO listing time in the market helps investors plan their trades better and track early price movements.
Key Takeaways
- The IPO listing day starts with a pre-open session at 9:00 am in India.
- Regular trading of IPO shares runs from 10:00 am to 3:30 pm.
- SEBI reduced the IPO listing timeline to T+3 (listing within three working days after issue closure), effective December 2023.
- IPO shares can be sold on the listing day once trading begins, but price movements are usually more volatile than on normal trading days.
Also Check: Upcoming IPO
What is an IPO?
IPO, or theInitial Public Offering, is the first time a private company sells its stock to the public, which allows the company to raise funds that it can then utilise for purposes like expanding operations, resolving debts, or research and development. Following the IPO, the stocks of the company are listed on the stock exchanges, where they are then publicly traded. The Securities and Exchange Board of India (SEBI), a regulatory authority and the watchdog of Indian stock markets, describes an IPO as an offer for subscription made to the public of specified securities by an unlisted issuer.
Read More About: Securities and Exchange Board of India (SEBI)
IPO Listing Timeline
The IPO listing timeline is elaborate and meticulously segmented, with predetermined activities slotted for different phases of the time duration. Here is a detailed breakdown of the IPO listing time.
|
Trading Phase |
Time |
Prescribed Activity |
|
Order placement |
9:00 am - 9:45 am |
It is a pre-market session when traders and investors can place limit orders, modify, cancel, or reorder their placed orders. |
|
Order matching and confirmation |
9:45 am - 9:55 am |
The opening price of the stock is determined by the exchange by matching the orders. |
|
Buffer |
9:55 am - 10:00 am |
No orders can be placed, modified or cancelled during this brief transition period. |
|
Trading |
10:00 am - 3:30 pm |
Traders can now begin active trading of the IPO stocks, and the shares are now bought and sold like any other stock. |
IPO Listing Process in India
The IPO listing process in India follows a structured sequence designed to ensure transparency and orderly market participation. Each stage plays a role in moving a private company to public trading.
-
Preparation Phase
The company decides to go public and starts internal preparation. This includes financial audits, legal checks, and strengthening compliance systems to meet regulatory requirements.
-
DRHP filing
The company files a Draft Red Herring Prospectus (DRHP) with the market regulator. This document shares key details such as business operations, financials, risks, and how the funds will be used.
-
Select the stock exchange
The company chooses the recognised stock exchange(s) where its shares will be listed. An application for listing is submitted as part of this step.
-
Roadshow
A roadshow is conducted to explain the company’s business and IPO details to potential investors. This helps gauge demand and build awareness.
-
Pricing
Based on investor demand and market conditions, the company finalises the price or price band. The final prospectus is then issued.
-
Allocation
Shares are allotted to different investor categories as per the rules. Investors who applied within the price range receive shares based on allotment results.
-
Listing
Once allocation is completed, the company’s shares are officially listed on the exchange. This marks the company’s entry into the public market.
-
Trading commences
Trading in the IPO shares begins on the listing day during market hours. Investors can buy and sell shares in the secondary market.
-
Lock-up period
Certain shareholders, including promoters and early investors, are restricted from selling their shares for a fixed period after listing as per SEBI regulations. This lock-up period helps maintain price stability and shows a long-term commitment to the company.
-
Post-IPO reporting
The company is required to share periodic financial results, corporate announcements, and key operational developments with stock exchanges and investors to ensure transparency, informed decision-making, and ongoing regulatory compliance after listing.
-
Stabilisation period
In some cases, stabilisation measures are used after listing to reduce sharp price movements. These actions help maintain orderly trading during the initial days, especially when demand or supply causes unusual price fluctuations.
How to Apply for an IPO in India?
Any investor or trader can apply for an IPO either online or offline. The Syndicate Members, sub-syndicate/Agents, SCSBs, Registered Brokers, Brokers, the CDPs, and CRTAs are authorised to collect bid cum application forms from the bidders, in relation to the offer.
- ASBA: This is an online method of applying for an IPO, and this facility is provided by Self-Certified Syndicate Banks. And the entire bid amount is blocked in the bidder’s account.
- UPI in ASBA: This online method of applying for an IPO is available for retail individual investors and for those shareholders bidding in the Shareholders Reservation Portion up to ₹5,00,000. The application is made via the UPI facility of the sponsor bank.
- 3-in-1 Account: This online facility lets investors and traders apply for an IPO through a 3-in-1 trading, demat, and bank account.
- Filled Form: It is an offline method of applying for an IPO, and the applicant has toopen a demat account. The investors and traders have to obtain an application form from a stockbroker, sponsor bank, or exchange website, and then submit the filled form to the stockbroker or sponsor bank.
What is IPO Price and IPO Listing Price?
The IPO price and IPO listing price are two separate prices and should not be confused as similar entities. The IPO price, also referred to as the Issue Price, is the initial price at which the company sells its stock during the IPO. On the other hand, the IPO listing price is the price of the stocks at the beginning of the IPO listing time, that is, when the stocks are available in the secondary markets.
Can I Sell an IPO on Listing Day?
Yes, IPO shares can be sold on the listing day once trading officially begins in the secondary market. In India, this happens after the pre-open session ends, and regular trading starts at 10:00 am on the listing day. Investors who receive share allotment can place sell orders during normal market hours, similar to trading any other listed stock.
Selling on the listing day is often considered by investors who aim to benefit from early price movements. Since demand and market sentiment play a major role on the first day, share prices may move sharply. This can create opportunities, but it also increases risk. Price volatility is usually higher on the listing day compared to regular trading days.
Before selling, investors should understand how order placement works, including price limits and execution rules. It is also important to be aware that not all sell orders may execute immediately if there is insufficient demand at the chosen price. Some investors prefer selling a portion of their shares on the listing day and holding the rest for later, depending on their financial goals and risk tolerance.
Careful planning and awareness of market timing can help investors make more informed decisions when selling IPO shares on the listing day.
How to Sell an IPO on Listing Day?
Once an IPO is listed on a recognised stock exchange, investors can start trading in the allotted shares on the listing day. As discussed earlier, regular trading begins at 10:00 am, after the pre-open session concludes. Selling IPO shares on the listing day follows the same basic process as selling any other listed stock.
After the shares are credited to your demat account, you can place a sell order during market hours. The steps involved are simple and are outlined below:
- Log in to your trading platform linked to your demat account.
- Go to the holdings section and select the IPO shares you wish to sell.
- Choose the quantity of shares and enter the selling price.
- Select the “Sell” option to place the order.
- Ensure the selling price matches market demand so the order can be executed.
The sell order will be completed only if there is a buyer at the chosen price. If the price is set too high, execution may be delayed or may not occur.
Investors are not required to sell all their shares on the listing day. Some may choose to sell a portion and hold the remaining shares for later, depending on market conditions and personal financial goals. Apart from allotted shares, buying and selling IPO shares through the secondary market is also possible once trading begins.
Conclusion
Understanding the IPO listing time helps investors and traders prepare for the first day of trading with better clarity. Knowing when the pre-open session starts, when prices are discovered, and when regular trading begins can support more informed decisions. Since price movements are often sharper on the listing day, awareness of market timing becomes especially important.
