IPO glossary

The terms you'll meet on an IPO page, in plain English.

Allotment: The process of deciding who receives shares when an IPO is oversubscribed, and how many.
Anchor investor: A large institutional investor allotted shares one day before the IPO opens, at the issue price, with a lock-in.
ASBA: Application Supported by Blocked Amount — your bank blocks the application money in your account instead of debiting it; it's released or debited after allotment.
Cut-off price: The final issue price set by the company and merchant bankers, usually the upper end of the price band. Retail applicants normally bid 'at cut-off'.
DRHP / RHP: Draft Red Herring Prospectus / Red Herring Prospectus — the offer documents filed with SEBI describing the company, risks and issue terms.
Face value: The nominal accounting value of a share (often ₹1, ₹2, ₹5 or ₹10), unrelated to the issue price.
Flipping: Selling allotted IPO shares on the listing day to capture the listing gain.
GMP: Grey Market Premium — the unofficial premium over the issue price at which IPO shares trade in the informal market before listing.
IPO: Initial Public Offering — the first sale of a company's shares to the public, after which the stock lists and trades on an exchange.
Issue size: The total amount a company aims to raise, made up of a fresh issue and/or an offer for sale (OFS).
Kostak: A fixed price paid in the grey market for a whole IPO application, whether or not it gets an allotment.
Listing gain: The percentage difference between the listing-day open price and the issue price.
Lot size: The fixed number of shares in one application unit. You bid in whole lots.
Mainboard IPO: An IPO on the primary NSE/BSE platform, generally larger with stricter norms.
NII / HNI: Non-Institutional Investor (High-Net-worth Individual) — anyone applying for more than ₹2 lakh. Split into sNII (₹2–10 lakh) and bNII (above ₹10 lakh).
Price band: The range (e.g. ₹90–₹100) within which investors bid. The final 'cut-off' price is usually the top of the band.
QIB: Qualified Institutional Buyer — mutual funds, insurers, banks and FIIs. Their portion of an IPO is typically up to 50%.
Registrar (RTA): The Registrar and Transfer Agent that processes applications, runs the allotment and handles refunds — e.g. KFin Technologies, MUFG Intime, Bigshare.
Retail (RII): Retail Individual Investor — applications up to ₹2 lakh. Allotment here is by lottery when oversubscribed.
SME IPO: An IPO on the NSE Emerge or BSE SME platform — smaller companies, higher minimum application (2 lots / ₹2 lakh+ for retail since 1 Jul 2025), lower liquidity, higher risk.
Subject to Sauda: A grey-market deal on an IPO application that only settles if the application receives an allotment.
Subscription: How many times the shares on offer were bid for. '10x' means demand was ten times supply.

New to IPOs? Start with What is IPO GMP and subscription explained.