InvestorQ : How do IPOs get oversubscribed in the Indian markets and is the listing price dependent on the oversubscription?
Arusha Ray made post

How do IPOs get oversubscribed in the Indian markets and is the listing price dependent on the oversubscription?

Answer
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Mahil Khan answered.
1 year ago


Oversubscription is normally a factor of demand. Quality issues of companies with strong brand names and reasonable valuations have been the key factors in oversubscription. When an IPO gets strong oversubscription and also is priced reasonably then it can enjoy a good listing on the stock exchanges.

What about the listing price? Does it depend on the oversubscription? There is no established relationship between oversubscription and IPO listing price. We know that the listing time for an IPO in India is around 7 working days. During this period the allotment is completed, other statutory filings done and the stock gets listed. While oversubscription is one of the reasons for a good listing, it will also depend on the pricing, the market conditions at the time of listing etc.