IPO Investing

Pricing


Any restrictions on pricing by companies?

Companies are allowed to freely price their issues. SEBI does not play any role in deciding the price for issues. As such, the single prices in case of fixed price issue as well as the price band in the case of a book building issue are determined by the company. The companies are however required to give in the offer document a detailed justification of the price. The basis of issue price is disclosed in the offer document. The issuer is required to disclose in detail about the qualitative and quantitative factors justifying the issue price.

Differential Pricing

Where one category of investors is offered shares at a price different from the other category, it is called differential pricing.

The following are the different categories of investors to whom shares can be issued at different pricing:

  1. Retail investors: An issuer can allot the shares to retail individual investors at a discount of maximum 10% to the price at which the shares are offered to other categories of public.
  2. Employees: An issuer company can offer the shares to employees at a discount of maximum 10 % of the floor price at which the shares are offered to other categories of public.
 

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Disclaimer:

Information provided herein is purely for dissemination of information and creating awareness among the investors about various aspects of investing. Although due care and diligence has been taken, the Institute of Company Secretaries of India (ICSI) shall not be responsible for any loss or damage resulting from any action taken by a person on the basis of the contents hosted on the website. It may also be noted that laws/regulations governing the markets are continuously evolving, hence an investor should familiarize himself with the latest laws/ regulations by visiting the relevant websites or contacting the relevant regulatory body.