Anyone interested in investing in the stock market must first understand the various types of issues and their opening days. An issue is when a company raises funds by publicly or privately selling its shares.
There are two types of issues: public issues and right issues.
A public issue occurs when a company sells its stock to the general public in the form of an initial public offering (IPO).Â
There are two types of public issues: fixed price issues and book-building issues. The company determines the price of the shares in a fixed price issue within a specific timeframe, and the maximum number of opening days is three to ten.
In a book-building issue, on the other hand, the company provides a price range and invites bidders to submit bids. According to SEBI regulations, bid days for the book-building issue typically range from three to seven days.
On the other hand, companies that are already listed on the stock exchange offer the right issues. They are open for a longer period, usually 15 to 30 days, with the first 15 days dedicated to the main process of share allotment and the remaining days dedicated to refunds and settlement.
It’s worth noting that companies announce their opening days in the Red Herring Prospectus (RHP), which includes information like the number of shares offered, the lot size of the IPO, and the number of days the issue will be open.
The maximum number of opening days for a fixed issue is three to ten. As a result, fixed issues are normally available for three days, although a company might prolong the days up to 10 days.
- Public Issue: A company offers its shares to the general public through an IPO. Fixed price issues are open for three to ten days, while book-building issues take three to seven days.
- Rights Issue: An issue offered by a company to its existing shareholders. The allotment process takes 15 days, followed by 15 days for refunds and settlement.
- Private Placement Issue: A company offers its shares to a select group of investors in a private placement issue. The number of opening days is not fixed and is determined by the company.
- Preferential Issue: A company offers its shares to a select group of investors at a price lower than the market rate. The number of opening days is not fixed and is determined by the company.
- Bonus Issue: A company issues additional shares to its existing shareholders as a reward. There are no opening days for a bonus issue, as it is offered only to existing shareholders.
- Follow-on Public Offer (FPO): A company offers additional shares to the public after its IPO. The opening days are similar to those of a public issue.
- Offer for Sale (OFS): A company allows its existing shareholders to sell their shares to the public. The opening days are similar to those of a public issue.
- Qualified Institutional Placement (QIP): A company issues shares to qualified institutional buyers. The opening days are not fixed and depend on market conditions.
Conclusion
Different types of issues have different timelines for their opening days. Through Shoonya, you can apply for any type of IPO shares and analyze companies through advanced comparability tools. So download the Shoonya App and start today!