IPO
- How to apply for an Initial Public Offering (IPO) via Whatsapp?
- Can a minor apply for an IPO?
- How to apply for an IPO in the existing shareholder or employee category?
- How long does it take for IPOs to list on the exchange?
- What does cut-off price mean?
- Are there any charges to apply for an IPO?
- How does the allotment process work if the IPO is oversubscribed?
- When are funds unblocked if the IPO was not allotted?
- Why is the IPO allotment status not available on the RTA's portal?
What does cut-off price mean?
The offer price at which shares are issued to investors in an IPO is known as the cut-off price, which can be any price within the specified price band.For this particular IPO displayed in the below image, the issue price range is 91-96. If an investor applies for the IPO at the cut-off price, they cannot enter a separate price.
Book-Building Issue
An IPO book-building issue typically begins with a specified price range, within which an investor can place bids for their desired quantity in multiples of the lot size. If an investor chooses the cut-off option while applying for the issue, it indicates their willingness to subscribe to shares at any price discovered within the price band through the book-building process. This increases the possibility of an allotment, allowing the investor to participate in the entire price-discovery process.