Key takeaways |
| The IPO listing time is divided into several segments including the order entry period, order matching & confirmation period, buffer period, and normal trading for IPOs. |
| Investors can sell IPO shares on the listing day, typically starting from 10:00 a.m. until 3:30 p.m. |
| Selling IPO shares on the listing day involves using a preferred stockbroker's trading platform, navigating to the holdings section, selecting shares to sell, choosing quantity and price, and executing the sell order. |
What is IPO listing time?
If you are an investor looking to invest in an Initial Public Offering (IPO), you must be aware of the IPO listing time. Investing in an IPO involves buying shares of a company’s stock when it goes public for the first time. By purchasing shares, you can become a shareholder and potentially earn significant profits as the company grows.
While the share market opens at 9:15 a.m. on working days, the listing hours for a stock on its listing day are different.Additionally, as various factors are involved in the listing of an IPO, the timings of an IPO listing are split into several segments. These segments are highlighted below.
Session | Time | Action |
Order entry period | 9.00 a.m. - 9:45 a.m. (approximately) | Orders for new listings (IPO) and re-listed instruments can be entered, modified, or cancelled. |
Order matching & confirmation period | 9:45 a.m. - 9.55 a.m. | Order placement, modification, or cancellation will be stopped. |
Buffer period | 9:55 a.m. - 10:00 a.m. | Facilitates the transition from pre-open to normal market. |
Normal trading for IPOs (new listing) and re-listed scrips | 10:00 a.m. - 10:30 a.m. | The exchange will move all unmatched market orders to the continuous session at the opening price. |
- Between 9:00 a.m. and 9:45 a.m., a stock’s opening price is determined through price matching and the stock’s demand. Order cancellation and modification happen during this period, and it is known as the IPO pre-open time.
- Between 9:45 a.m. and 9:55 a.m., the IPO listing’s pre-market session closes, and modifications and cancellations are no longer possible.
- Between 9:55 a.m. and 10:00 a.m., the shift from the call auction in the pre-open session to the continuous trading session takes place and is considered a buffer period.
- Between 10:00 a.m. and 3:30 p.m., the normal trading session resumes, and shares are bought and sold in the secondary market.
IPO listing date
The IPO listing Date marks the day when a company's shares are officially traded on a recognised stock exchange. Typically scheduled around three business days after the IPO closing date, the final listing date is officially announced by the company and exchanges.
IPO listing process in India
1. Preparation phase
- The company decides to go public and appoints investment banks as underwriters.
- Conducts extensive due diligence, including financial audits and legal compliance checks.
2. DRHP filing
The company files a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI).
3. Select the stock exchange
Decide on the exchange for listing shares and apply to the selected exchange.
4. Roadshow
- Conduct a roadshow with underwriters to promote the IPO to potential investors.
5. Pricing
- Determine the offering price based on investor demand and market conditions.
- Issue the final prospectus, known as the Red Herring Prospectus (RHP), with the offer price range.
6. Allocation
- Allocate shares to various investor categories, including Qualified Institutional Buyers (QIBs), Non-Institutional Investors, and Retail Individual Investors.
- Bidders apply for shares within the specified price range.
7. Listing
List the company's shares on stock exchanges like NSE and BSE.
8. Trading commences
- Shares become available for trading in the secondary market on the IPO day.
- Investors can buy and sell shares at market prices.
9. Lock-up period
Promoters and certain shareholders are subject to lock-up periods, during which they cannot sell their shares.
10. Post-IPO reporting
Provide regular financial and operational updates to stock exchanges and investors.
11. Stabilisation period
Underwriters may engage in stabilising activities to support the stock's price during the early trading period.
The IPO process in India ensures regulatory compliance and investor scrutiny to maintain transparency and fairness in the capital markets.
IPO listing price
The IPO listing price is the initial price at which a company's shares are offered to the public for trading on a stock exchange during its initial public offering (IPO). This price is determined through the IPO pricing process, which considers factors such as market demand, company valuation, investor appetite, and prevailing market conditions. The IPO listing price plays a crucial role in attracting investors and determining the company's market capitalisation upon listing.
Can we sell IPO shares on the listing day?
After knowing the IPO opening time, you should know the IPO listing day’s trading rules. Can you sell IPO shares on the listing day? The answer is yes. Investors often opt for IPOs to capitalise on listing gains. However, to make prudent decisions, you must understand the IPO process and strategise when and how to sell the IPO shares.
As per the experts and market researchers, it is better to sell your shares on the listing day than exit the market at a later date. According to market research, nearly 50% of the IPOs’ listing day prices are more than their year-end prices. Thus, the profit you can make on the listing day is considerably more than what you can make at the end of the year. Additionally, it is suggested that after an IPO gets listed, the prices usually drop as a result of market trends and sentiments, which can influence the shares. Furthermore, you can minimise the loss by exiting the market on the listing day.
Let us now look at how you can sell IPO shares on the listing day.
Additional read: List of Upcoming IPOs in Mar 2024
How to sell IPO shares on the listing day?
Once the IPO gets listed on the stock exchanges, you can begin trading in the IPO shares. As already mentioned, the IPO trading time starts at 10:00 a.m. on the listing day for the specific IPO stock. After receiving your allotted shares, selling your shares is very similar to selling other securities. This process is outlined below.
- Visit your preferred stockbroker’s trading platform (you must have an active Demat account with the stockbroker)
- Navigate to the holdings section and choose the shares you want to sell
- Next, you must choose the quantity and price and select the ‘Sell’ option
- The listing price must be equal to or less than the selling price for the order to be executed in the market.
Alternatively, you can only sell a part of the shares on the listing day and sell the remaining shares at a later date. In addition to the allotted shares, it is also possible for you to purchase and sell shares directly from the secondary market.
IPO issue price and listing price
The IPO issue price refers to the price at which a company initially offers its shares to investors during the IPO subscription period. It is the price at which investors purchase shares directly from the company. The issue price is determined based on various factors such as company valuation, market demand, and the advice of underwriters.
On the other hand, the IPO listing price is the price at which the shares of the company begin trading on the stock exchange after the IPO subscription period ends. It is the price at which investors can buy and sell shares in the secondary market. The listing price is determined through market mechanisms such as price discovery during the pre-open session on the listing day, based on investor demand and supply.
In summary, the IPO issue price is set by the company during the IPO process, while the IPO listing price is determined by market forces when the shares are listed for trading on the stock exchange.
Conclusion
The listing time of IPOs is different from the normal trading session. On the day the company is listed on the stock market, you can only start trading after 10:00 a.m., and the session lasts until 3:30 p.m. You can sell your IPO shares on the listing day and enjoy significant profits, but you will have to trade between this five-and-a-half-hour period.
