Time is of the essence when a company goes public with the Initial Public Offering (IPO), and it makes it more of a valid question to ask: What is the IPO listing time? The IPO listing time at the two stock exchanges, NSE and BSE, in India is 9 am; however, the actual trading begins an hour later at 10 am.
The IPO trading session is, however, preceded by a 45-minute long pre-open session that begins at 9 am and continues till 9:45 am. The final listing price is determined between 9:45 am and 9:55 am, which is followed by a 5-minute buffer period.
The traders and investors need to be fully aware of the IPO listing time, as it helps them in making swift trades and also discover price trends based on the early market sentiment. The traders and investors must also know that trading during the initial IPO listing hours is volatile, offering potential for securing profit but also exposing them to considerable risk.
What is an IPO?
IPO, or the Initial 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.
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
A company intending to go public has to go through several mandatory stages before its stocks are listed on the Indian stock exchanges. Once it appoints an SEBI-registered intermediary and carries out the due diligence, it has to file a Draft Red Herring Prospectus (DHRP) that signals its intent to go public. Here are the steps in the IPO listing process as mandated by SEBI guidelines:
- Step 1: The issuer’s private company files an Offer Document, Draft Red Herring Prospectus, for listing on the stock exchanges. The offer document is filed in a prescribed format with SEBI, Stock Exchanges, and the Registrar of Companies (ROC).
- Step 2: The issuer’s private company receives observations and other feedback from the regulatory authorities.
- Step 3: Once the company complies with all observations and feedback that it has received from regulatory authorities, the company files the updated offer document, called the Red Herring Document (RHP), inviting the general public to invest in the IPO subject to stipulated timelines.
- Step 4: Once the offer is successfully completed, the shares of the company are traded on the stock exchange(s) where the shares are listed.
How to Apply for 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 to open 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.
Conclusion
The IPO listing time is specified and must be known by traders and investors who are keen on investing in an IPO. By staying informed about the IPO listing time, traders and investors can make quick trades based on the discovery of early price trends and early market sentiment. If you want to invest in an IPO, you must carefully study its offer document and seek additional information from research reports, industry reports, the company’s credit ratings, and third-party assessment reports, which will assist you in making informed investment decisions.
FAQs
What is the IPO listing time in India?
The IPO listing time is 9:00 am to 3:30 pm on the designated day of the company’s listing. However, the actual trading begins at 10 am.
Is the IPO listing time the same for NSE and BSE?
Yes, IPO listing time is the same for all the stock exchanges.
When can I start selling IPO stocks?
You can begin trading IPO stocks from 10 am onwards on the listing day, which is when the trading period begins and the orders are allowed to be changed, modified or cancelled.
What should I consider before applying for IPO stocks?
You should properly study the offer document of the company and do additional analysis by studying research reports, industry reports, and other relevant information about the company. You can go ahead once you are assured that investing in a particular IPO is in line with your financial goals and risk appetite.
Why does a company go public?
The key objective for a company to go public is to generate funds, which it can then use for expanding operations, research and development, or for repaying debts. The company’s offer document does explain how it intends to spend the funds.
