The IPO Process is like the long and rigorous training an athlete goes through before they are finally allowed to compete in the Olympics. A company cannot simply decide to sell shares on Monday and list them on Tuesday. There are strict laws, heavy paperwork, and multiple checkpoints managed by the Securities and Exchange Board of India (SEBI) to ensure that the company is honest and the investors' money is safe.

For a company, this journey can take anywhere from 6 to 12 months. For you, the investor, the visible part of the process only lasts about a week. Understanding the full cycle helps you see the big picture from a private boardroom decision to the final bell ringing at the stock exchange.

Phase 1: The Preparation (3–6 Months)

Before the public even hears about the IPO, the company must get its house in order.

Hiring the Architects (Investment Bankers): The company appoints Book Running Lead Managers (BRLMs). These are financial experts (like Motilal Oswal) who manage the entire legal and financial transition.
Due Diligence: Lawyers and auditors comb through every contract, bank statement, and legal case of the company to ensure there are no skeletons in the closet.
The First Draft (DRHP): The company files the Draft Red Herring Prospectus (DRHP) with SEBI. This is a massive document (often 400+ pages) explaining everything about the business.

Phase 2: Regulatory Scrutiny (2–4 Months)

Now, the Watchdog takes over.

SEBI Review: SEBI examines the DRHP. If they find anything confusing or missing, they issue Observations and ask the company to fix it.
The Observation Letter: Once SEBI is satisfied, they give a No Objection or observation letter. This is the green light the company needs to proceed.
Filing the RHP: The company updates the document with the latest numbers and files the Red Herring Prospectus (RHP) with the Registrar of Companies (RoC).

Phase 3: The Launch (2–3 Weeks)

This is when the buzz starts and you get involved.

Roadshows & Marketing: Company bosses travel to meet big fund managers to generate interest. The Price Band (e.g., ₹500 - ₹510) is announced.
The Bidding Window: The IPO opens for 3 to 5 working days. Retail, NII, and QIB investors place their bids and block their money via ASBA.
Basis of Allotment: After the window closes, the registrar uses a computerized lottery to decide who gets the shares.

Phase 4: Listing (T+3 Days)

The final transformation from private to public.

Credit & Refunds: Shares are sent to your Demat account; unblocked money is returned to those who didn't get allotment.
Listing Day: The shares officially start trading on the NSE/BSE. The company is now a Publicly Listed Entity.

The 2026 IPO Process Timeline

Stage

Activity

Duration

Stage 1

Appointing Bankers & Due Diligence

1–2 Months

Stage 2

SEBI Review & Observations

2–3 Months

Stage 3

Marketing & Roadshows

1–2 Weeks

Stage 4

Public Subscription (The IPO)

3–5 Days

Stage 5

Allotment & Listing (T+3)

3 Working Days

Frequently Asked Questions (FAQs)

Who decides the IPO price?

The company and its investment bankers decide the price based on the company's profits, its future potential, and how much other similar companies are worth.

Can SEBI stop an IPO process midway?

Yes. If SEBI finds that the company has provided false information or hidden a major risk, it can halt the process at any stage.

What is the role of an Underwriter?

They are like Insurers. If the public doesn't buy all the shares, the underwriters promise to buy the remaining ones so the company gets its money.

Why is it called a Red Herring prospectus?

Because it contains a legal warning (in red ink) saying that it is not yet the final document as the final price and date are still missing.

What is Price Discovery?

It is the process of letting the market decide the final price (within the band) based on how many people want the shares.

Do companies always list on both NSE and BSE?

Most large companies do, but it is not mandatory. They can choose to list on only one exchange if they wish.

What is a Fresh Issue vs OFS in the process?

Fresh Issue means the company is creating new shares to get new money. OFS (Offer for Sale) means existing owners are selling their old shares to the public.

Can I apply for an IPO before the bidding window opens?

Some brokers offer a Pre-apply feature, but your bid is officially sent to the exchange only when the window opens on Day 1.

What happens after the listing?

The IPO process ends, and the company must now follow Post-Listing Compliance, which includes sharing its results every 3 months.

What is the Quiet Period?

It is a time (usually from filing DRHP till listing) when the company and its bankers are restricted from making hype-filled promotional statements.

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