Understanding IPOs: Price band, lot size
When it comes to IPOs, investors encounter two key terms: price band and lot size. The price band is the range within which investors can bid for shares during the IPO process. This range is determined by the company and its underwriters based on various factors such as demand, market conditions, and company valuation.
Investment examples
For retail investors looking to participate in the Hyundai Motor India IPO, the minimum investment required would be Rs 13,720 (calculated as Rs 1,960 x 7 shares). Retail investors can bid for a maximum of 14 lots, equating to 98 shares, which would require an investment of Rs 1,92,080.
For Small Non-Institutional Investors (sNII), the minimum investment is higher, set at 15 lots or 105 shares, totaling Rs 2,05,800. On the other hand, Big Non-Institutional Investors (bNII) must invest in a minimum of 73 lots, or 511 shares, resulting in a total investment of Rs 10,01,560.
How to apply for Hyundai Motor India IPO
Through Brokerage: Most brokers provide online IPO applications for their account holders. To place a bid, investors should log into their trading account, navigate to the IPO section, and complete the required details.
Key considerations for investors
Before applying for an IPO, investors should evaluate several important factors, including:
Company fundamentals: Assess the company’s financial health, growth prospects, and industry outlook.
Valuation metrics: Consider the issue size, price-to-earnings (P/E) ratio, and expected return on investment.
Market factors: Understand market volatility, regulatory risks, and subscription process details.
With high demand often influencing the chances of allotment, especially for retail investors, it is important for the investors to conduct thorough research. IPO shares may list at a premium or discount based on various factors, making it crucial to review the company’s financial health, management, and future growth potential before applying.
First Published: Oct 16 2024 | 1:29 PM IST
