IPO Glossary 2026 – Complete IPO & Stock Market Terms A to Z
A complete IPO glossary and stock market terminology reference. Find clear definitions of every IPO term you will encounter — from GMP and RHP to ASBA, cut-off price, anchor investor, and more. Use this glossary as you research, apply, and track Indian IPOs.
This glossary contains 47 essential IPO and stock market terms, organized alphabetically. Bookmark this page for quick reference. Cross-references link to detailed guides on key topics.
A
Allotment
The process by which IPO shares are distributed to applicants. Mainboard allotment happens on T+1, SME on T+2.
Anchor Investor
Qualified institutional buyers who get IPO shares one day before the public issue opens. They commit to a 30-day lock-in.
ASBA
Application Supported by Blocked Amount — SEBI-mandated process where IPO funds are blocked, not deducted, until allotment.
Application Number
Unique ID assigned to each IPO application — used to track status and check allotment.
B
Basis of Allotment (BoA)
Public document released by registrars after allotment, showing how shares were distributed across applicants.
Bid Period
The window during which investors can apply for an IPO — typically 3 working days for mainboard, 5 for SME.
Book-Build Issue
IPO type where price is discovered through bidding within a price band. Most modern IPOs use book-build.
BRLM
Book Running Lead Manager — investment bank that manages the entire IPO process. Examples: Kotak, Axis Capital, ICICI Securities.
C
Cut-off Price
In book-build IPOs, agreeing to pay the final discovered price (top of price band). Recommended for retail investors.
Cover/Coverage
Another term for subscription multiplier — how many times an IPO has been bid over its total shares.
D
Demat Account
Dematerialized account that holds shares electronically. Required to receive IPO allotment.
DRHP
Draft Red Herring Prospectus — first version of IPO offer document filed with SEBI for approval. Excludes final price.
E
EPS
Earnings Per Share — net profit divided by total outstanding shares. Key valuation metric.
F
Face Value
Nominal value of each share (typically Rs.1, Rs.2, Rs.5, or Rs.10). Different from issue price.
Fixed Price Issue
IPO type where the issue price is set in advance (no bidding). Common in some SME IPOs.
Fresh Issue
Portion of an IPO where new shares are created and money goes to the company.
G
GMP
Grey Market Premium — unofficial premium at which IPO shares trade before listing. Indicates market sentiment.
Grey Market
Unofficial, unregulated market where IPO applications are traded before allotment/listing. Not regulated by SEBI.
H
HNI
High Net-worth Individual — investor applying for more than Rs.2 lakh in an IPO. Same as NII.
I
IPO
Initial Public Offering — when a private company sells shares to the public for the first time and lists on stock exchanges.
Issue Price
The final price at which IPO shares are allotted to investors. In book-build IPOs, this is the upper band.
Issue Size
Total value of an IPO (price x shares offered). Categorized as mainboard (Rs.10 Cr+) or SME (below Rs.10 Cr).
K
KFintech
KFin Technologies — one of the largest IPO registrars in India, handling allotment for most mainboard IPOs.
L
Link Intime
Link Intime India — major IPO registrar handling allotment for many mainboard IPOs.
Listing Day
The day IPO shares start trading on stock exchanges. Mainboard: T+3 from issue close; SME: T+6.
Listing Gain
Difference between listing price and issue price, expressed as percentage. Positive = profit on listing day.
Lot Size
Minimum number of shares an investor can apply for. Set by SEBI based on issue price (Rs.14,000-15,000 for mainboard retail).
M
Mainboard IPO
IPOs of companies that list on NSE/BSE main board. Minimum issue size Rs.10 Cr. Stricter regulations.
N
NII
Non-Institutional Investor — applying more than Rs.2 lakh. Sub-categorized into Small NII (Rs.2-10 lakh) and Big NII (Rs.10 lakh+).
O
OFS
Offer For Sale — portion of an IPO where existing shareholders (founders, PE funds) sell their shares. Money goes to sellers, not the company.
Oversubscription
When IPO receives more demand than available shares. E.g., 5x oversubscribed = 5 times more bids than shares offered.
P
P/E Ratio
Price-to-Earnings ratio — issue price divided by EPS. Lower is generally better; compare with industry average.
Price Band
Range within which investors can bid for an IPO. Example: Rs.95-100. Final price is discovered through book-building.
Promoter
Founders or controlling shareholders of the company. Their share lock-in period is typically 1-3 years post-listing.
Prospectus
Detailed legal document describing the IPO — financials, risks, use of funds. Two versions: DRHP (draft) and RHP (final).
Q
QIB
Qualified Institutional Buyer — banks, mutual funds, insurance companies. Their subscription is the strongest signal of IPO quality.
R
Registrar
SEBI-registered intermediary handling IPO applications, allotment, and refunds. Main registrars: KFintech, Link Intime, Bigshare.
Retail Investor
Individual applying for less than Rs.2 lakh in an IPO. Gets 35% reservation in mainboard IPOs.
RHP
Red Herring Prospectus — final IPO offer document filed before issue opens. Includes price band and final issue size.
RoNW
Return on Net Worth — net profit divided by net worth. Indicates how efficiently a company generates profit from shareholder equity.
S
SEBI
Securities and Exchange Board of India — regulator overseeing all IPOs, stock markets, and securities transactions.
SME IPO
Smaller IPOs on NSE Emerge or BSE SME platforms. Issue size below Rs.25 Cr typically. Minimum investment Rs.1 lakh+.
Subscription Status
Multiple by which IPO has been subscribed. 5x = 5 times bidded. Updated live during the bid period.
T
T+1, T+3, T+6
Trading day notation. T = IPO close date. T+1 = next working day. Mainboard listing on T+3, SME on T+6.
U
UPI Mandate
Authorization given via UPI app for IPO bid amount to be blocked in your bank account. Must be approved within 24 hours.
Underwriter
Investment bank that commits to buy unsold IPO shares. Reduces issuer risk in case of undersubscription.
W
Withdrawn IPO
IPO that was filed but later cancelled — often due to weak market conditions or regulatory issues.
Most Important IPO Terms to Know First
If you are new to IPO investing, start by mastering these 10 core terms:
- GMP — Grey Market Premium
- RHP / DRHP — Red Herring Prospectus documents
- ASBA — Application Supported by Blocked Amount
- Price Band — Bidding range (e.g., Rs.95-100)
- Cut-off Price — Accept final discovered price (recommended for retail)
- Lot Size — Minimum shares per application
- Subscription Status — How many times the IPO is bidded
- QIB / NII / Retail — Three main investor categories
- Allotment — Process of share distribution
- Listing Gain — Difference between listing price and issue price
Frequently Asked Questions
What is an IPO glossary?
An IPO glossary is a reference list of common terms used in Initial Public Offerings, helping investors understand technical terminology like GMP, RHP, ASBA, anchor investor, cut-off price, lot size, and others.
What are the most important IPO terms to know?
The most important IPO terms are: GMP (Grey Market Premium), RHP/DRHP (Prospectus documents), ASBA (Application Process), Lot Size, Price Band, Cut-off Price, QIB/NII/Retail Categories, Allotment, Listing Gain, and Subscription Status.
What is the difference between mainboard and SME IPO?
Mainboard IPOs are from larger companies listed on NSE/BSE main exchanges with minimum issue size of Rs.10 Cr and stricter SEBI regulations. SME IPOs are from smaller companies on NSE Emerge/BSE SME platforms with relaxed norms but higher minimum investment.
What does ASBA mean?
ASBA stands for Application Supported by Blocked Amount. It is the SEBI-mandated process where IPO application amount is blocked (not deducted) in your bank account until allotment. If you do not get allotment, the amount is unblocked automatically.
Disclaimer: Definitions provided are for educational purposes and may be simplified for clarity. For precise legal or regulatory definitions, refer to SEBI regulations and the relevant IPO prospectus (RHP).