IPO Basics – Level 1

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IPO can be launched for any or all of the above reasons

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The answer is “All of the above“

IPO can be launched for any or all of the above reasons

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Draft Red Herring Prospectus (DRHP) is arguably the most important document anyone can read before investing into an IPO

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The correct answer is “DHRP“

Draft Red Herring Prospectus (DRHP) is arguably the most important document anyone can read before investing into an IPO

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It is true that companies prefer to launch IPOs during the bull market because the chances of getting people interested and paying higher premium for the shares is higher. In bear markets, average investors are scared to invest in IPOs.

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The right answer is “True“

It is true that companies prefer to launch IPOs during the bull market because the chances of getting people interested and paying higher premium for the shares is higher. In bear markets, average investors are scared to invest in IPOs.

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When a stock gets locked in the upper circuit, there is no way to buy the stock back and square off the position. Therefore, it is very important to check the upper circuit of the stock before shorting it. In fact, we strongly recommend not shorting any stock that has upper & lower circuits.

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When a stock gets locked in the upper circuit, there is no way to buy the stock back and square off the position. Therefore, it is very important to check the upper circuit of the stock before shorting it. In fact, we strongly recommend not shorting any stock that has upper & lower circuits.

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IPO market is also called “Primary Market” because the investors are directly buying the share from the company. Once the company gets listed on the stock exchanges, any new investor has to buy the shares from the other shareholders and hence stock market is also called “Secondary Market”

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The correct answer is “True”

IPO market is also called “Primary Market” because the investors are directly buying the share from the company. Once the company gets listed on the stock exchanges, any new investor has to buy the shares from the other shareholders and hence stock market is also called “Secondary Market”

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This is not true. A number of IPOs list and trade below their IPO price after listing. Therefore, we should never be in a rush or frenzy to apply for an IPO. You can always get the shares of the company at a cheaper price, later.

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The answer is “False”

This is not true. A number of IPOs list and trade below their IPO price after listing. Therefore, we should never be in a rush or frenzy to apply for an IPO. You can always get the shares of the company at a cheaper price, later.

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The answer is “Book Building”

All the major IPOs are of the “Book Building” type

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The correct answer is “Book Building”

All the major IPOs are of the “Book Building” type

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The answer is “SEBI”

SEBI is the big daddy of the capital market and every company requires its approval before launching an IPO

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The correct answer is “SEBI”

SEBI is the big daddy of the capital market and every company requires its approval before launching an IPO

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The answer is “listing gains”

Most of the retail audience in India look to make some quick money by getting the IPO allocation and hoping that the listing happens at a higher price.

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The correct answer is “listing gains”

Most of the retail audience in India look to make some quick money by getting the IPO allocation and hoping that the listing happens at a higher price.

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The answer is “one”

Only one IPO application is accepted for one PAN card.

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The correct answer is “one”

Only one IPO application is accepted for one PAN card.