Last year, in India, there were 138 IPOs (Initial Public Offerings), which raised a total of 64,000 crore rupees. Many people earn a good amount of money by investing in IPOs. Even in 2021, the average gains on the day when IPOs were listed were as high as 32%. Isn't that amazing?
So, let's watch this video to learn about some important terms related to IPOs.
First, there's GMP, which stands for Grey Market Premium. This is the price at which shares are traded unofficially before they are officially listed. It gives investors an idea of the possible opening price of the IPO.
When company owners sell their own shares and exit, it's called an 'Offer for Sale.' On the other hand, if the company needs new funds by issuing new shares and the owners' stake is getting diluted, it's called a 'Fresh Issue.'
In every IPO, there's a price range for the shares. The minimum price is called the 'Floor Price,' and the maximum is called the 'Cutoff Price.' Generally, oversubscribed shares are allotted at the cutoff price.
Do share with us in the comments if you were allotted any shares in an IPO this year.
Disclosure: For your information & Educational Purpose
Disclaimer: investment in securities Market are subject to market risks, please read the documents carefully before investing
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