IPO glossary: IPO terms explained simply
Plain-English meanings of the words you meet when applying for an IPO in India. Each term links to a full guide where there is one.
Allotment · Anchor investor · Application number · ASBA · Basis of allotment · Book building · CDSL TPIN · Cut-off price · Demat account · DP ID and client ID · DRHP · Employee quota · Face value · FPO (follow-on public offer) · Fresh issue · GMP (grey market premium) · HNI · Issue price · Kostak · Lead manager · Listing gain · Listing price · Lock-in · Lot size · Mainboard IPO · Market maker · Muhurat trading · NII · Offer for sale (OFS) · Oversubscription · Pre-open session · Price band · Promoter · QIB · Refund · Registrar · Retail investor · RHP · SEBI · Shareholder quota · SME IPO · Subject to sauda · Subscription · T+3 · Third-party UPI · UPI mandate
Allotment
The step after an IPO closes in which the registrar decides who gets shares and how many, following the basis of allotment approved by the stock exchange. If an IPO is subscribed less than 1 time, everyone valid gets what they bid for; if more, shares are rationed. Results are published on the registrar's website, usually a working day after the close.
Anchor investor
A large institutional investor (a mutual fund, insurer or foreign fund) that commits to buy shares a day before the IPO opens to the public. Anchors have a lock-in: half their shares for 30 days and the rest for 90 days.
Application number
The number your broker or bank gives an IPO bid. With your PAN, it identifies the application on the registrar's and exchanges' status pages.
IPO application status: how to check your bid went through
ASBA
Application Supported by Blocked Amount. When you bid, the money stays in your bank account but is blocked, and is debited only for the shares you are allotted. UPI bids and net-banking bids both work this way.
Applying for an IPO through net banking (ASBA)
Basis of allotment
The method, finalised with the stock exchange after the issue closes, by which shares in each category are distributed: how many applicants get shares and how many each. For an oversubscribed retail portion it is a computerised draw of lots.
Book building
The way most IPOs are priced: the company sets a price band, investors bid within it, and the final price is fixed after seeing the demand. The alternative, a fixed-price issue, sets the price in advance.
CDSL TPIN
A PIN from the depository CDSL that, with an OTP, authorises selling shares from your demat account, including newly allotted IPO shares.
How to sell IPO shares: listing day step by step
Cut-off price
A bid option for retail investors that accepts whatever final price is set, instead of naming one. The amount blocked is worked out at the top of the price band, and any difference is released.
What the cut-off price means in an IPO
Demat account
The account that holds your shares in electronic form, opened through a broker or bank (a depository participant). Allotted IPO shares are credited to it before listing.
DP ID and client ID
The two numbers that identify a demat account. The DP ID identifies the depository participant (your broker or bank) and the client ID identifies you with it. Together they form the demat account number, and registrars accept them to look up an allotment.
How to check IPO allotment status
DRHP
Draft red herring prospectus: the draft offer document a company files with SEBI before its IPO. It carries almost all the details except the final price and the dates, and may change after SEBI's comments.
DRHP, RHP and prospectus: what to read before an IPO
Employee quota
A part of the issue reserved for the company's employees, often with a discount. An employee can usually apply up to ₹5 lakh in it, apart from applying as a retail or HNI investor.
Face value
The nominal value printed on a share, such as ₹1, ₹2, ₹5 or ₹10. It is an accounting figure and is not the price you pay, which is the issue price.
FPO (follow-on public offer)
A public share sale by a company that is already listed, usually priced at a discount to its market price. Applying works the same way as for an IPO.
IPO vs FPO: what's the difference?
Fresh issue
New shares the company creates and sells in the IPO. The money goes to the company, to be used as the offer document states (the objects of the issue).
GMP (grey market premium)
The unofficial premium over the issue price at which an IPO's shares trade before listing. It is not regulated, changes daily and is often wrong, so treat it as one hint, not a forecast.
What is IPO GMP? Full form, meaning and how to calculate it
HNI
High net-worth individual. In an IPO, an investor who bids more than ₹2 lakh. The category is officially called NII, and is split into small HNI (₹2 to 10 lakh) and big HNI (above ₹10 lakh).
What is the HNI category in an IPO?
Issue price
The final price per share at which the IPO is sold, fixed within the price band after the bids are in. In most book-built IPOs it is the top of the band.
Kostak
An unofficial, fixed amount paid for an IPO application in the grey market, whether or not the application is allotted. It is not regulated and not enforceable.
Kostak and subject-to-sauda, explained
Lead manager
The merchant bank (also called the book running lead manager) that prepares the offer document, markets the IPO and manages the process. Its name is on the first page of the offer document.
Listing gain
How much a share's listing price is above the issue price, as a percentage: (listing price − issue price) ÷ issue price × 100. A negative figure is a listing loss.
What happens on IPO listing day
Listing price
The price at which a newly listed share opens for trading, found in the exchanges' pre-open session on listing day. It can differ a lot from the GMP.
What happens on IPO listing day
Lock-in
A period in which certain shareholders (promoters, pre-IPO investors and anchors) cannot sell. Shares allotted to ordinary IPO applicants have no lock-in.
Lot size
The minimum number of shares you can bid for, and the multiple in which you can increase a bid. One lot multiplied by the upper price band is the minimum investment.
IPO lot size, price band and cut-off price explained
Mainboard IPO
An IPO listed on the main platforms of NSE and BSE, for larger and established companies, with more disclosure and, usually, a larger retail portion than SME IPOs.
SME IPO vs mainboard IPO: what is different
Market maker
A firm that quotes buy and sell prices in an SME share for a set period after listing so that trading continues. Mainboard shares do not need one.
SME IPO vs mainboard IPO: what is different
Muhurat trading
The short special trading session NSE and BSE hold on Diwali to mark the new Samvat year. Trades in it settle like any other.
Diwali muhurat trading 2026: date, timings and how it works
NII
Non-institutional investor: anyone who is not a QIB and bids more than ₹2 lakh. HNI and NII mean the same category in an IPO.
What is the HNI category in an IPO?
Offer for sale (OFS)
Existing shareholders, such as promoters or early investors, selling their shares in the IPO. The money goes to the sellers, not to the company.
Oversubscription
When investors bid for more shares than a category offers. Retail allotment then becomes a lottery of one lot per selected application.
Pre-open session
A short session before the normal market opens on listing day in which orders are collected and the opening price of the new share is found. Normal trading starts at 10 AM.
What happens on IPO listing day
Price band
The range, such as ₹95 to ₹100, within which investors may bid. The final issue price is set inside it. The lower and upper ends are at most 20% apart for a normal issue.
IPO lot size, price band and cut-off price explained
Promoter
The person or group who started the company and controls it. Promoters usually keep a large stake after the IPO and are locked in for a time.
QIB
Qualified institutional buyer: large institutions such as mutual funds, insurers, banks and foreign portfolio investors. In a mainboard IPO, up to half of the shares are for QIBs.
IPO categories explained: retail, HNI (NII) and QIB
Refund
In an IPO paid for through UPI or ASBA, the release of money blocked for an application that was not allotted (or only partly allotted). It is an unblock, not a payment back.
IPO money still blocked? What to do
Registrar
The firm (such as KFintech, MUFG Intime, Bigshare or Maashitla) that processes applications, decides the allotment, and publishes the result. Its website is where you check your allotment.
How to check IPO allotment status
Retail investor
In an IPO, an individual who bids up to ₹2 lakh. The retail portion is usually 35% of a mainboard issue, and when oversubscribed, shares go to applicants by a draw.
IPO categories explained: retail, HNI (NII) and QIB
RHP
Red herring prospectus: the offer document filed before the IPO opens. It has everything except the final price and the exact number of shares, which are in the prospectus filed after the issue closes.
DRHP, RHP and prospectus: what to read before an IPO
SEBI
The Securities and Exchange Board of India, the regulator of the securities market. It sets the rules IPOs must follow, and reviews offer documents.
Shareholder quota
A part of an IPO reserved for the shareholders of the listed parent company, as of a record date stated in the RHP. It is a separate application from retail or HNI.
The shareholder quota in an IPO
SME IPO
An IPO by a small or medium enterprise, listed on the NSE Emerge or BSE SME platform. Lots are larger, risk is higher, and trading is thinner than on the mainboard.
SME IPO vs mainboard IPO: what is different
Subject to sauda
An unofficial grey-market price paid for an IPO application only if it is allotted. It is usually higher than kostak, and not regulated or enforceable.
Kostak and subject-to-sauda, explained
Subscription
How many times the shares on offer were bid for. If 1 crore shares are offered and 10 crore are bid for, the IPO is subscribed 10 times. It is reported overall and by category.
What is IPO subscription (times subscribed)?
T+3
The timeline under which an IPO lists within three working days of the issue closing: allotment is finalised, refunds and share credits happen, and trading starts.
Third-party UPI
A UPI ID or bank account in someone else's name. IPO bids paid this way are rejected: each applicant must pay from their own account.
Using a family member's UPI ID or bank account for your IPO
UPI mandate
The request your UPI app shows after you bid, asking you to approve blocking the bid amount. A bid is not valid until it is approved, by 5 PM on the closing day.
The IPO UPI mandate, explained
Information, not investment advice. GMP is an unofficial grey-market indicator; figures come from public sources (InvestorGain) and may be late or wrong. Not registered with or affiliated to SEBI, the exchanges, the registrars or InvestorGain.