IPO Glossary

Plain-English definitions of the jargon you meet in an IPO.

Anchor investor

A large institutional investor allotted shares one day before the issue opens, at a fixed price, in exchange for a lock-in (typically 30 and 90 days). A strong anchor book is often read as a confidence signal — but anchors can and do sell once their lock-in ends.

ASBA

Application Supported by Blocked Amount. Your bank blocks the application money in your account instead of debiting it; it is only debited if you are allotted shares.

Cut-off price

Agreeing to accept whatever final price the company sets within the band. Retail investors normally bid at cut-off.

DRHP

Draft Red Herring Prospectus. The detailed disclosure document filed with SEBI. The Risk Factors and Objects of the Issue sections matter most.

Face value

The nominal accounting value of a share (often ₹1, ₹2, ₹5 or ₹10). It has almost nothing to do with the issue price or what the share is worth.

Fresh issue

New shares sold by the company; the money goes into the business.

GMP

Grey Market Premium. An unofficial, unregulated price at which IPO shares trade before listing, based on grey-market dealer consensus. A sentiment signal, not a promise.

Lock-in

A period during which certain shareholders (promoters, anchors, pre-IPO investors) cannot sell. Lock-in expiry adds supply and can pressure the price.

Lot size

The minimum number of shares you can apply for, and the step size above that.

NII / HNI

Non-Institutional Investor (also called High Net-worth Individual): applications above the retail limit. Allotment here is proportionate, not a lottery.

OFS

Offer For Sale. Existing shareholders selling their shares; the money goes to them, not the company. Not automatically bad — it depends on who is selling and why.

Price band

The range within which bids can be placed, e.g. ₹450–₹475. The company sets the final issue price within this band.

QIB

Qualified Institutional Buyer — mutual funds, insurers, banks, FPIs. The QIB subscription figure is watched closely as a demand signal.

RoNW / RoE

Return on Net Worth / Return on Equity. Profit as a percentage of shareholders' funds. A quick read on how efficiently the business earns.

Registrar

The agency (KFintech, Link Intime / MUFG, Bigshare and others) that processes applications, runs the allotment and handles refunds/unblocking.

Retail Individual Investor (RII)

Applications up to the retail limit (an application value just under ₹2 lakh). Allotment in an oversubscribed retail category is a lottery — one entry per PAN.

Subscription / oversubscription

How many times the shares on offer were bid for. "40x subscribed" means bids came in for 40 times the available shares.