What Is an IPO and How Does It Important?

Seeking the first republic shares to invest? Think of an IPO as a company's grand opening. Once it go public, you can get the chance to own a piece of a company right.

The full form of IPOs is initial public offering. Shares of a privately held company are initially offered to the public through this process. This allows investors to step into the company’s ownership by shifting it from a privately owned company to a publicly traded company.

Types of IPO

There are primarily two IPO options for companies intending to go public: the fixed price offering and the book building offering. Both types hold unique characteristics that influence the pricing and availability of shares to investors.                                                                

1. Fixed Price Offering

The company settles on a particular price for the shares in advance of selling them in a fixed price offering. In this manner, investors are able to determine the precise cost at which they must apply for shares.

Key Features:

• The price of shares is predetermined and disclosed in the prospectus.
• Investors must pay the full amount when applying for the IPO.
• Suitable for investors who prefer transparency in pricing.

2. Book Building Offering

In a book building offering, the company provides a price range, known as a price band, rather than a set price. Afterwards, investors place bids within this range, and the final price will be decided by the market.

Key Features:

• The price band typically has a floor price (minimum) and a cap price (maximum).
• Investors can bid for shares at a price they’re comfortable with, within the range.
• The final issue price is determined after the bidding process, based on the highest demand.
  
  

How IPO Works

A company can raise capital and investors can gain ownership through an IPOs, which connect the primary and secondary markets. After the company is listed on a stock exchange, the secondary market allows investors to simply trade these shares, while the primary market is where shares were first distributed directly to investors.

Here is a step-by-step breakdown of the IPO process:

1. Decision to Go Public

The company made the choice to take advantage of the primary market to raise capital for investments by offering shares to the general public. In general, this decision is driven by an operational requirement to expand, reduce debt, or introduce new ideas.

2. Selection of Underwriters

The underwriters for an IPOs are financial institutions or investment banks which the company selects. The underwriters’ roles include measuring interest, determining a pricing range, and ensuring the offering’s success in the primary market.

3. Preparation of the Draft Red Herring Prospectus (DRHP)

Financial data, risks, and business plans are all included in a DRHP that the company creates. In order to ensure public transparency, this document must be filed to SEBI.

4. SEBI Review and Approval

The DRHP is reviewed by SEBI to make sure it follows all the rules. The IPOs will not proceed to the primary market subscription phase unless it has been approved.

5. Marketing the IPO

During this stage, companies attract potential investors through commercials, presentations, and roadshows. In the main market, this increases demand and draws in prospective purchasers.

6. Opening the IPO for Subscription

The public is able to participate in the IPO for a certain period of time. Many investors use the ASBA (Application Supported by Blocked Amount) mechanism to submit bids for shares, especially retail investors.

7. Allotment of Shares

After the subscription period, shares are distributed to investors. For retail investors, if the IPO is oversubscribed, the allotment is decided through a lottery system. Those not allotted shares will receive a refund.

8. Listing on Stock Exchanges

At the point that they are listed on a stock exchange, such as the NSE or BSE, the shares can be freely traded on the secondary market. As a result, shareholders may take advantage of supply and demand to purchase and sell shares at market prices.

Advantages of Investing in an IPO

• IPOs allow investors to buy shares at the ground level, often before the company achieves its full potential. If the company performs well in the long run, early investors can enjoy substantial returns.
• One of the most attractive aspects of IPOs is the possibility of listing gains, where the stock price rises significantly on the day it is listed on the stock exchange. For example, companies with high demand during the subscription phase often witness strong price surges on listing day.
• IPOs provide an opportunity to invest in sectors or industries that may not be represented in your existing portfolio. This diversification reduces overall investment risk by spreading it across different businesses and industries.

Interested in first public shares? learn how to invest in IPO and what requirement to prepare before get into the market: https://www.monetyra.com/monetyra-academy/stock-academy/what-is-an-ipo-in-india

What Are Preferred Shares in Simple Terms?

What Are Preferred Shares?

Preference shares or preferred stocks are hybrid financial instruments issued by companies to raise capital. As the name implies, holders of these shares enjoy specific “preferential” rights over ordinary shareholders.

The most distinct advantage is the priority in dividend distribution. When a company announces profits, it must pay the fixed dividend rate to preferred stockholders before distributing a single rupee to holders of equity shares. Furthermore, if the company goes bankrupt or faces liquidation, preference shareholders have a claim on assets that ranks higher than equity holders, though still below secured creditors and bondholders.

Infosys Ltd. Review

 Infosys Ltd. is a globally recognized Indian IT company that specializes in innovative technology and consulting services. Known for empowering businesses around the world, Infosys delivers operational excellence and strategic growth through its expertise in digital transformation. 

Company Name: Infosys Ltd.

Ticker Symbol: INFY

Founded in:  Bengaluru, India (1981)

Market Cap: Approximately ₹6.07 lakh crore

Share Prices: ₹1,460.90

P/E Ratio: 21.58

Industry:  IT Services and Consulting 

Type:  Large Cap

Overview 

Infosys Ltd. was founded in 1981 with its Infosys headquarters located in Bengaluru, India. It is a global leader in technology consulting, offering innovative IT solutions such as software development, cloud computing, AI analytics, and cybersecurity.

The company has a strong presence across multiple industries, such as finance, healthcare, retail, manufacturing, and telecommunications. Its technological expertise is demonstrated by Infosys’s major products, such as the EdgeVerve Systems for automation and the Infosys Finacle for banking.

Infosys upholds its commitment to sustainability and education through CSR initiatives such as Infosys Foundation and Springboard. With a global presence in over 50 countries, including India, the United States, Canada, the United Kingdom, and Australia, and a workforce of over 350,000, Infosys drives innovation and supports enterprise growth.

Products & Services of Infosys Ltd.

This Infosys reviews highlights that company provides a wide array of products and services across various sectors. Here’s a categorized overview of some Infosys products and services:

Engagement Solutions

Infosys Ltd. boosts customer engagement through personalized digital marketing, immersive metaverse interactions via the Infosys Metaverse Foundry, and streamlined omnichannel e-commerce solutions for seamless customer experiences.

Intelligent Insights

Infosys Topaz leverages generative AI and advanced analytics to drive smarter operations and innovation. It helps businesses unlock insights for informed decision-making. Infosys Sustainability Services promotes sustainable practices through actionable, data-driven strategies.

Innovation Solutions

Infosys Ltd.  fosters innovation with secure, scalable Blockchain solutions and connected IoT ecosystems for smarter operations and better customer experiences. Its Engineering Services streamline product development and lifecycle management. These solutions accelerate time-to-market and drive continuous innovation.

Acceleration Solutions

Infosys accelerates transformation with Infosys Cobalt, delivering comprehensive cloud migration and management services. Its Enterprise Agile and DevOps streamline development using modern methodologies. Tailored solutions on platforms like Salesforce and Microsoft Cloud to optimize operations and boost agility.

Assurance Services

Infosys company safeguards business operations with Cyber Security solutions, delivering advanced protection against evolving threats. Its Application Development & Maintenance services ensure high-performance, reliable applications for seamless operations. Additionally, Quality Engineering provides rigorous testing to maintain superior software quality and reliability.

Consulting Expertise

Infosys provides technology and domain consulting to align IT strategies with business goals to achieve optimal results. Its CIO Advisory offers strategic guidance on technology modernization and innovation. Business Process Management (BPM) solutions enhance efficiency in HR, finance, and customer service operations.

Digital Products

Infosys company provides digital transformation solutions through platforms like Finacle, a universal banking solution used globally by financial institutions; Panaya, which accelerates application delivery and innovation; Infosys Equinox, a digital commerce platform designed for personalized shopping experiences; and EdgeVerve Systems, offering AI and automation solutions through products like AssistEdge and TradeEdge.

Subsidiaries of Infosys Ltd. 

Infosys Ltd. has shown consistent financial growth over the past five years. The Infosys review below summarizes its profit and loss statements, demonstrating steady revenue and profit expansion.

• EdgeVerve Systems Limited: Develops software products for various industries, including banking and retail.
• Infosys BPM Limited: Specializes in outsourcing services across finance, HR, customer service, and procurement, with global operations.
• Infosys Consulting Holding AG: A Switzerland-based firm offering IT and management consulting for digital transformation, supply chain, and operational strategy.
• Infosys Public Services Inc.: Focuses on IT services for U.S. public sector organizations, including healthcare technology and government digital services.

Discover how Infosys perform and whether it suit your investing goal: Infosys Review

Get to know the Suzlon Energy Ltd.

Suzlon Energy Ltd. was founded in 1995 by entrepreneur Tulsi Tanti, the original Suzlon Energy owner, who recognized the early potential of wind energy. The company established itself as a prominent wind turbine manufacturer and service provider across India and international markets. While originally founded in Surat, Suzlon’s global headquarters is now located at the “One Earth” campus in Pune, Maharashtra, India. 

The company offers a comprehensive range of wind energy solutions, including wind turbine generators (WTGs), wind resource assessment, turnkey project execution, and operation and maintenance (O&M) services. These combined offerings cover the complete project lifecycle from basic feature evaluation to long-term operational support. 

Over the years, Suzlon expanded its footprint in more than 17 countries, with major operations in Europe, North America, and Asia. One of its strengths is offering end-to-end wind energy solutions, making it a trusted partner for large-scale renewable projects.

Suzlon’s stock has experienced a difficult move since its 2005 launch. The shares reached approximately ₹400 in 2008 before crashing below ₹10 due to debt issues, global financial slowdown, and internal restructuring. However, recent years have seen renewed investor interest driven by India’s clean energy push and the company’s recovery efforts, making Suzlon a notable corporate comeback story.

Products & Services of Suzlon Energy Ltd.

Our Suzlon Energy reviews provide an overview of Suzlon Energy Ltd.’s products and services:

Wind Energy Products

Wind Turbine Generators (WTGs) offer a range of advanced wind turbines with capacities from 2.1 MW to 3.15 MW, optimized for diverse wind conditions across India and globally. Suzlon turbines are made in India with over 85% domestic components, supporting the Aatmanirbhar Bharat initiative.

Wind Energy Services

• Turnkey Project Execution: Comprehensive solutions covering site assessment, engineering, procurement, construction, and commissioning of wind farms.
• Operation & Maintenance (O&M): Long-term O&M services ensuring high turbine availability (over 98% for S120 fleet), reliability, and optimized energy output.
• Wind Resource Assessment: Detailed studies to maximize project efficiency and returns.

Solar Energy Solutions

Suzlon Energy is expanding into wind-solar hybrid solutions, having installed over 340 MW of solar capacity and developed a 1,500 MW hybrid park in Rajasthan since 2016. The company provides turnkey renewable energy solutions through strategic partnerships, supporting India’s 2030 clean energy targets.

Is Suzlon Energy Ltd. a Good Investment?

Suzlon has strong potential due to a 5.7  GW order book, government support, and significant debt reduction—factors that could boost revenue and investor sentiment. However, project delays, high debt (₹7,200 cr), and regulatory barriers add downside risk. Its stock is also volatile, falling over 20% YTD in 2025. 

Based on our Suzlon Energy reviews, Suzlon company offers opportunities for both short-term traders and long-term investors. Traders can capitalize on strong bullish momentum above key moving averages (major trend indicators), with profit targets at ₹50-70 and frequent sentiment-driven price swings. Long-term investors may benefit from India’s growing green energy sector, but must tolerate volatility and have confidence in India’s clean energy future.

Discover how Suzlon expand and the company's history performance: Suzlon Energy Review

What Is Grey Market Premium (GMP)?

 Before the actual listing day of an initial public offerings, there is usually some anticipation in the world of IPOs. Investors often search for early indications to forecast a stock’s potential performance, and one of the most widely used indicators is the grey market premium that shows up before the market actually opens.

What Is IPO Grey Market Premium?

Grey market is the channel for the informal exchange of securities or goods that are not approved by the original issuer or producer. Investors can purchase and sell IPOs on the grey market before their official listing on a stock exchange.

An IPOs grey market premium (GMP) is the price that investors are willing to pay for a company’s shares in this market. This premium reflects the market’s perception of the company’s potential and the anticipated demand for its shares.

How to Calculate Grey Market Premium

Grey market premium calculations are easier than they seem. It’s the difference between the IPO’s official price and the price at which shares are sold on the grey market.

As a simple example, the GMP would be ₹100 if the IPO issue price was ₹500 and the grey market price was ₹600. Divide the premium by the IPO issue price and multiply the result by 100 to get the GMP as a percentage. A premium of 20% would apply here.

Difference Types of IPO Grey Market Rate

The grey market premium is the main focus of the IPO grey market. GMP is a measure of investors’ enthusiasm for an IPO before its official launch. However, GMP isn’t the only significant rate type in the grey market; the Kostak rate and the Subject to Sauda rates are also important. Investors may gain an insight of possible demand and sentiment from these three market rates, which together make the grey market a lively center of unauthorized trade.

Kostak Rate

The Kostak rate is the premium you earn for selling your IPO application in the grey market prior to allotment. Regardless of the outcome of the allocation, someone basically pays you a certain price for the rights to your initial public offering application.

For example, if you sell your IPO application for ₹5000 Kostak, you will receive that amount regardless of whether the allotment occurs. Most people who aren’t willing to take any risks use this tactic.

Subject to Sauda Rate

Subject to Sauda is an agreement made on the IPO grey market where the person selling the IPO application only gets paid if they gets an allotment of shares. There is no deal, and no money is paid if no shares are given out. It’s a way for sellers to make extra money on IPO applications if the allotment is successful.

Why Is GMP Important in IPOs?

IPOs investors rely on the gray market premium as a signal. Before a company’s shares are publicly tradable, it provides useful information about possible market enthusiasm and expected financial gains.

A high GMP usually means that investors are really interested and that they expect to earn a lot of money. On the other hand, we could predict a more conservative market sentiment from a low GMP. The GMP is an informal measurement, which means its reliability is not guaranteed.

Find out deep details and differences of Grey Market Premium vs Listing Price: What Is Grey Market Premium and How It Impacts IPO Listings?

NSE vs BSE which is better for beginners?

 What Is NSE?

The National Stock Exchange (NSE) was established in 1992 and began operations in 1994. It is India’s largest stock exchange in terms of trading volume. NSE was the first exchange in India to offer a fully electronic trading system, making trading more transparent and efficient. Its flagship index is the Nifty 50, which tracks the performance of 50 of the largest and most liquid companies listed on the exchange.

What Is BSE?

The Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia, established in 1875. It has over 5,000 listed companies, making it one of the largest exchanges globally in terms of the number of listed firms. The benchmark index of BSE is the Sensex, which comprises 30 of the top-performing companies.

NSE vs BSE: Which Suits Your Strategy?

We’ve divided this section into three practical aspects: one for active traders, one for long-term investors, and another for those interested in IPO opportunities. Each angle highlights how your trading or investment style can influence the better choice for you.

For Traders

If you are an active trader looking for high liquidity and better price discovery, NSE is generally the better option. The narrow bid-ask spreads and higher trading volumes make it ideal for intraday trading and algorithmic strategies.

For Long-term Investors

Long-term investors may not see a significant difference between NSE and BSE as both exchanges list the same top companies. However, BSE offers a wider choice due to the sheer number of listed companies, which may be helpful if you are looking for diversification or small-cap opportunities.

IPO Listings

Some companies choose to list on only one exchange. Therefore, if you’re interested in IPOs, it’s worth having access to both NSE and BSE to make the most of trading opportunities across both exchanges.

Can I Trade on Both NSE and BSE?

Most brokers in India offer access to both NSE and BSE through a single trading account. This makes it convenient for investors and traders to switch between exchanges based on real-time market dynamics. As a trader or investor, you can place orders on either exchange depending on where you find better pricing, liquidity, or execution speed at the time of trading. Having access to both also enables you to take advantage of price differences between the two exchanges, a strategy sometimes used for arbitrage opportunities.

Discover key their difference clearly: Difference Between NSE vs BSE: A Simple Comparison

What Is Bombay Stock Exchange (BSE)?

 BSE is not just the oldest stock exchange in Asia, but it also acts as a key location for businesses looking for funding and investors aiming to grow their wealth.

The Bombay Stock Exchange (BSE) is a regulated marketplace where securities such as stocks, bonds, mutual funds, and derivatives are bought and sold. It operates under the supervision of the Securities and Exchange Board of India (SEBI) and provides the framework for transparent and efficient trading in both the primary market and the secondary market (where new securities are issued and existing securities are traded).

Definition and Role of BSE

BSE acts as a bridge between investors and companies. Companies list their shares on the BSE to raise capital, while investors use the platform to invest and trade. The exchange ensures liquidity, price discovery, and investor protection through advanced infrastructure and regulatory oversight.

History and Evolution of BSE

BSE was established in 1875, making it the first stock exchange in Asia. It started as a group of stockbrokers who would gather under a banyan tree in Mumbai’s town hall area. In 1957, it was recognized by the Indian government under the Securities Contracts Regulation Act.

In 1995, BSE launched BOLT (BSE Online Trading), becoming one of the first exchanges in India to go fully electronic. This marked a major transformation, making trades faster, more secure, and accessible across India.

Importance of BSE in India’s Economy

The Bombay Stock Exchange is critical to the Indian economy for several reasons:

• Access to Capital: By enabling companies to raise funds through IPOs, BSE supports entrepreneurship, business expansion, and job creation.
• Investor Participation: It allows retail and institutional investors to participate in wealth creation.
• Sensex as a Barometer: The Sensex, BSE’s benchmark index, reflects the performance of India’s top 30 companies and is often used to gauge the health of the Indian economy.
• Technological Infrastructure: Platforms like BOLT ensure real-time trading and transparency, which boosts investor confidence and market efficiency.

Key Features of BSE

• BOLT (BSE Online Trading): Real-time, automated, and scalable electronic trading system.
• T+1 Settlement Cycle: A quick settlement that reduces risks and improves liquidity.
• Investor Protection Fund (IPF): Offers compensation to investors in case of broker default.
• Wide Product Range: Includes equities, debt securities, derivatives, mutual funds, and ETFs.
• Strict Listing Requirements: Ensures that only credible and transparent companies are listed.

These features make BSE a secure, reliable, and accessible platform for millions of investors across India and abroad.

Read more: BSE: India’s Oldest Stock Exchange and Its Modern Role