Once the IPO process is over the exchanges give the listing date of the security on secondary market. The company has to satisfy the rules to get listed on a particular exchange. The most important rule is minimum paid up equity capital that a company has to have. Paid up capital represents the number of shares for which the investors have paid as per the issue price fixed. If there are no installments in an issue Paid-up capital is generally equal to subscribed capital.
Listing day price of the share gives an idea of future of the stock. If the issue is oversubscribed in the IPO then there fairly more chances of premium to the IPO price in the secondary market. This is because the over subscription indicates that there are more buyers. Usually institutional investors don’t get the sufficient quantity of shares in IPO and try acquiring them in secondary market (mostly of the times retail investors are the net sellers on listing day). However there is no guarantee that a stock will always get a premium price on listing day. Some factors like the local and global market conditions on the listing day affect the price.
Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
Related posts:
- Stock Basics – Primary and Secondary Equity Markets
- Listing Rules for New Companies on BSE /IPO Rules
- IPO – Agreement with Investment bank
- IPO – Allotment of Shares
- Rules to be Listed on BSE for Companies Already Listed on Other stock exchanges
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