Glossary
IPO terms, in plain English.
The words that show up on an offer document or an application screen, explained without the jargon.
- Allotment
- The process of assigning shares to applicants. When a category is oversubscribed, retail allotment is usually decided by a computerized lottery.
- Anchor investor
- A qualified institutional investor allotted shares a day before the issue opens to the public, at a price that helps set market confidence ahead of listing.
- ASBA
- Applications Supported by Blocked Amount — the mechanism, implemented via a UPI mandate or your bank, that blocks your application money in your own account instead of transferring it out immediately.
- BO ID
- Beneficiary Owner ID — the single 16-digit number that identifies a demat account held with CDSL.
- Book building
- The process of determining a public issue's final price by collecting bids across a price band from investors, rather than fixing the price upfront.
- Cut-off price
- The final price at which shares are allotted, decided within the price band once bidding closes. Retail investors bidding "at cut-off" agree to pay whatever that price turns out to be.
- DP ID / Client ID
- For demat accounts held with NSDL, the account is identified by two parts: an 8-character DP (Depository Participant) ID and an 8-character Client ID.
- Green shoe option
- A mechanism that lets an issuer allot additional shares, through a stabilizing agent, to support the stock price for a period after listing.
- HNI / NII
- High Net-worth Individual / Non-Institutional Investor — the applicant category above the retail limit.
- IPO
- Initial Public Offering — the process through which a company first sells shares to the public and gets listed on a stock exchange.
- Lot size
- The minimum number of shares that make up one application unit. You can only bid in whole multiples of a lot, not for individual shares.
- Listing gain
- The percentage difference between the price a stock lists at on the exchange and the price it was allotted at. Never guaranteed.
- Oversubscription
- When the number of shares applied for in a category exceeds the number of shares on offer in that category.
- Price band
- The price range — minimum to maximum — within which investors can bid for shares in a book-built issue.
- QIB
- Qualified Institutional Buyer — the category covering large institutional investors such as mutual funds, banks and insurers.
- Registrar
- The SEBI-registered registrar and transfer agent responsible for processing applications and finalizing the allotment for an issue.
- Retail category
- The investor category for applications up to ₹2,00,000, subject to change under applicable SEBI rules and the specific issue's terms.
- UPI mandate
- A block placed on funds in your bank account when you apply for an IPO via UPI, authorized by you in your UPI app. Funds are debited only if shares are allotted.