Purpose of the IPO Process

• The IPO process starts with the company’s decision to go public and the appointment of investment bankers.

• It ends with the listing of the stock on the exchange.

• The main objective is to secure a strong market valuation while ensuring there is value left for investors to benefit from listing gains.

• A successful IPO helps enhance the company’s reputation and market credibility.

Role of Investment Bankers (Book Running Lead Managers – BRLMs)

• BRLMs are central to the IPO process and often include multiple bankers for large issues.

• They advise the company on issue timing, pricing, and regulatory compliance.

• They conduct roadshows to generate institutional interest and coordinate with retail distribution networks.

• They support post-listing investor relations and stock performance.

Seven-Step IPO Process

1. Appointment of Investment Bankers

   • The IPO process begins with hiring BRLMs.

   • They manage compliance, marketing, demand assessment, allotment procedures, and investor engagement.

2. SEBI Approval

   • The Securities and Exchange Board of India (SEBI) must be notified and approve the IPO plan.

   • Only after initial clearance can the next steps proceed.

3. Regulatory Filings

   • The company, assisted by the BRLMs, files the Draft Red Herring Prospectus (DRHP) with SEBI.

   • SEBI reviews and may request clarifications before giving the final go-ahead.

   • Once approved, the prospectus is made public.

4. Marketing the Issue

   • With DRHP approval, the company and BRLMs begin marketing the IPO.

   • Roadshows are conducted in global financial hubs to attract institutional investors.

   • Retail investors are reached through brokers, media, and distribution channels.

5. Pricing the IPO

   • Based on demand estimates, the price band for the IPO is set.

   • Applications are invited within this band, and the final price is discovered through book building.

6. Managing the IPO Process

   • IPO forms are distributed and made available online and offline.

   • Brokers and depositories are mobilized to upload applications before the cut-off time.

   • The process is coordinated to ensure smooth execution without last-minute disruptions.

7. Basis of Allotment

   • After the issue closes, allotment is determined based on oversubscription levels across investor categories.

   • The basis of allotment is finalized and approved by the stock exchanges.

   • The registrar processes the allotments and credits shares to investors’ demat accounts before the listing date.

Time Sensitivity of the IPO Process

• The IPO process is highly time-bound.

• Every step, from filing to allotment and listing, follows strict regulatory timelines.

• Effective coordination is essential to avoid delays or compliance issues.