As the name suggests, upcoming Initial Public Offerings (IPOs) are those IPOs that are expected to open for subscription in the coming days. Generally, the names of the companies are included in the upcoming IPOs list when the regulator, i.e., the SEBI, approves the DRHP and the dates have been finalised.

The Draft Red Herring Prospectus (DRHP), also known as the Offer Document, is a preliminary registration document prepared by the underwriter. After thorough analysis, the SEBI approves the DRHP and the final prospectus is known as the Red Herring Prospectus (RHP).

It can be extremely useful for potential investors to study the company and its offering. The DRHP / RHP contains all the information, including but not limited to: IPO Structure, Financials, Management details, Current Valuation, etc.

1. Take a Pie of the Business:

   IPO gives an amazing opportunity to the investors to take part in the ownership of the company. Usually, an IPO is launched by small companies which have the potential for exponential growth.




2. Potential Listing Gains:

   Listing gains happen when a company lists on the stock exchanges at a price higher than the IPO price. Investors can sell their shares on the listing day and earn the listing gains.




3. Diversification:

   IPOs provide a great opportunity for diversification where investors can invest in the companies going public for the first time.

1. Risk:

   IPOs provide a great exit opportunity to the existing investors, i.e., Founders, Alternative Investment Funds (AIFs), Angel investors, etc. These investors invest money at a very early stage, which means they have a strong incentive to sell their shares at a higher price. Real price discovery happens after the company becomes public. This is the risk that investors take when investing in an IPO.




2. Information Asymmetry:

   Private Companies operate in a less regulated environment. As IPOs are launched by private companies, information may not be accurate regarding the prospects and financial numbers may be inflated.




3. Non-allotment of Shares:

   In case of over-subscription, shares are allotted on the basis of a lottery system in the retail category, which significantly reduces the chances of allotment. The higher the quality of IPO, the more the subscription rate and the lesser the chances of allotment.

One can apply in the IPOs by following a few simple steps:

1. Log-in to your Pocketful dashboard and go to the Current IPOs section.




2. Click on the IPO in which you want to apply.




3. Fill in the required details such as number of lots, price and UPI ID.




4. Check the terms and conditions box and click on submit.




5. After submission, a mandate will be sent to your UPI app. Approve the mandate by entering your UPI PIN.

1. Retailers:

   Retail Investor is an individual investor who can invest in an IPO up to a maximum of INR 2 lakhs.




2. Qualified Institutional Bidders (QIBs):

   These are domestic and foreign financial institutions like mutual funds, pension funds, etc. They are registered with market regulator, the SEBI and generally invest in very large amounts.




3. Non-Institutional Investors (NIIs)

   Investors who do not fall in the category of QIB and Retailers come under the category of Non-Institutional Investors (NIIs). They invest INR 2 lakhs or more in an IPO issue. They are also known as High Net-worth Individuals (HNIs).

   NIIs include Resident Individuals, NRIs, Companies, Trusts, etc. Registration of them is not mandatory with the SEBI.




4. Anchor Investors:

   These are institutional investors who apply for INR 10 crores or more in an IPO. They cannot sell their shares on a listing day. There is a lock-in period of 30 days for Anchor Investors.




5. Employees

   These are the employees of the company which is coming with the IPO. In a few IPOs, a certain portion is reserved for the employees as well.