What counts as a public offer?
Companies raise money from the public, and existing shareholders sell to it, in a few different ways:
| Offer | Who is selling | Where the money goes |
|---|---|---|
| IPO, fresh issue | The company, before listing | The company |
| IPO, offer-for-sale portion | Promoters or early investors | Selling shareholders |
| FPO | A company already listed | The company |
| OFS via stock exchange | Promoters of a listed company | Selling shareholders |
| Buyback (tender offer) | You, back to the company | You |
Many IPOs combine a fresh issue with an offer for sale. The "objects of the issue" section of the offer document tells you how much new money the company is actually raising and what it plans to do with it.
How IPO applications work in India
SEBI requires public issue applications to go through ASBA (Application Supported by Blocked Amount). Individuals can use a UPI mandate for bids up to ₹5 lakh, so the money stays in your own account, blocked, until allotment.
Investors are grouped into categories. Individuals bidding up to ₹2 lakh fall in the retail category; above that, they are non-institutional investors, who are allotted on a different basis. Retail bidders can tick the "cut-off" option to bid at whatever final price is fixed within the band.
Since December 2023, shares must list within three working days of the issue closing (T+3), so your money stays blocked for a much shorter time than it once did.
Mainboard versus SME IPOs
SME IPOs list on separate exchange platforms meant for smaller companies. Their offer documents are reviewed by the stock exchange rather than SEBI, minimum application amounts are larger, and trading after listing is usually thin. A high subscription figure tells you nothing about whether you will be able to sell easily later.
Before you bid
- Read the risk factors and financial statements, not just social media summaries
- Compare the valuation with listed peers on simple measures such as price-to-earnings
- Decide in advance whether you would hold for the long term if the listing is weak
- Never borrow money to apply for an IPO
Our team helps you set up the demat account and UPI link, explains the offer document and investor categories, places applications on your instructions and follows up on allotment and refunds. We do not tell you which issue to apply for — that choice is yours.
