SS Retail IPO Opens September 16: Price Band ₹403–₹424, Lot Size & Valuation Review

A price band is the range, with a lower limit (floor) and an upper limit (cap), within which investors may bid for shares in a book-built IPO. The company and its lead managers announce the band in the price band advertisement, usually a few working days before the issue opens, and the Red Herring Prospectus carries the same range. The final issue price is discovered through bidding and is fixed inside this range, so it can never be higher than the cap or lower than the floor. Under SEBI rules the cap should not exceed 120 percent of the floor price, which keeps the range reasonably tight. Retail investors normally bid at the cap or at the cut-off price so that their bid stays valid whatever the final price turns out to be. The band matters because it sets the maximum money you must keep blocked in your bank account: lot size multiplied by the cap price. Companies can revise the band during the issue, but that requires public notice and an extension of the bidding period by at least three working days. Fixed-price issues do not have a band; they have a single price.

A fresh issue is the part of an IPO in which the company creates and sells new shares, so the money raised goes to the company itself. Because new shares are added, the total number of shares outstanding rises, and the ownership of existing shareholders, including the promoters, is diluted. The proceeds are used for the purposes stated in the offer document under objects of the issue, such as building a factory, repaying debt, funding working capital, expanding a brand or general corporate purposes. Many IPOs combine a fresh issue with an offer for sale, and the split between the two is a useful clue. A larger fresh issue suggests that the company is raising capital to grow, whereas a mostly offer-for-sale issue means existing shareholders are cashing out, and the company receives little. Investors should read the objects of the issue carefully, check how much is earmarked for debt repayment compared with expansion, and see whether proceeds from the issue are expected to raise earnings per share in the coming years. The size of the fresh issue is stated in the price band announcement.

A bid is an investor's offer to buy a specified number of shares in an IPO at a price within the announced price band. In a book-built issue, you submit a bid through your broker, your bank's net banking or a UPI-enabled app, stating the quantity in lots and either a specific price or the cut-off option. A bid can be revised upward or downward, or cancelled, while the issue is open, and a revised bid replaces the earlier one. Each bid is recorded in the exchange's order book, and the totals across all prices form the book from which the final price is discovered. The amount blocked for a bid is the number of shares multiplied by the highest price at which you bid, so bidding at the cap blocks the largest sum. If the final price is lower, the extra is released. Only one bid per category per PAN is generally allowed, with bids from the same PAN in the same category treated as duplicates. Bids placed by retail investors on the last day are accepted until the exchange cut-off, typically 5 pm, though UPI approval for the mandate needs to be completed within the same window.

The basis of allotment is the method and result by which shares are distributed among applicants after an IPO closes. It is finalised by the registrar to the issue in consultation with the stock exchange, and the exchange approves it before shares are credited. The document lists, for each category, how many applications were received, how many shares were applied for, the oversubscription ratio, and how many applicants received how many lots. Where a category is undersubscribed, every valid applicant gets the full quantity applied for. Where it is oversubscribed, shares are allotted proportionately in the QIB and NII categories, and by a computerised lottery in the retail category, so the minimum allotment is one lot. Because the basis shows exactly how many lots each applicant got, it is the best proof of how fair the process was. The basis of allotment is usually published on the registrar's website and the exchanges one working day after the issue closes, around the T plus 1 day. Investors can then check their status using their application number or PAN.

Allotment is the step after an IPO closes in which the company decides who receives shares and how many. Once bidding ends, the registrar prepares the basis of allotment, which explains how the shares were shared between categories and applicants. If an issue is not oversubscribed in a category, most valid applicants get what they asked for. If it is oversubscribed, shares are rationed. In the retail category, successful applicants are chosen by a computerised lottery and each winner usually receives one lot, because the demand is far larger than the supply. Larger categories receive shares in proportion to their bids. After allotment, shares are credited to the demat accounts of successful applicants, and money for unsuccessful applications is released from the ASBA block. SEBI requires the whole process, from issue close to listing, to be completed within three working days. You can check your allotment status on the registrar's website using your application number, PAN or demat details, and on the exchange page for the issue.

The listing date is the day on which a company's shares start trading on the stock exchange after its IPO. Before this day the shares exist only as an allotment in the registrar's records and, after the credit step, in your demat account, but they cannot be traded. Under SEBI's present timetable the shares must list within three working days of the issue closing, a schedule known as T plus 3, where T is the closing day. The exchange announces the exact date in a circular once the basis of allotment is finalised. On listing day there is a special pre-open session in which the opening price is discovered through an auction-like process, followed by normal trading. The price at which the stock opens, compared with the issue price, gives the listing gain or loss. Investors who received shares can sell from the first minute of trading, subject to price bands the exchange applies to new listings, which are tighter for SME and certain other issues. Listing dates appear on every IPO page on IPO Bulletin along with the issue price, so you can plan ahead.

A prospectus is the legal document in which a company invites the public to subscribe to its shares or debentures and discloses the information investors need to decide. In India the Companies Act 2013 and SEBI regulations require it to contain complete and accurate details about the business, promoters, directors, financial statements, risks, legal cases, capital structure and the purpose for which funds are being raised. There are stages in the document trail of an IPO: the Draft Red Herring Prospectus filed with SEBI, the Red Herring Prospectus filed before the issue opens, and the final Prospectus filed with the Registrar of Companies after the price and size have been fixed. The final prospectus is the binding document that records the issue price, the amount raised and the allotment details. Because investors rely on it, the company, its directors and the lead managers carry legal liability for any misstatement, and investors can seek remedies for material misrepresentation. For ordinary investors a long prospectus can be daunting, so start with the summary of the issue, the risk factors, the objects of the issue and the financial tables, and then read the rest as needed.