InvestorQ : Is a premium issue the same as a premium listing?
IPO
Moii Chavate made post

Is a premium issue the same as a premium listing?

Answer
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Ria Jain answered.
2 years ago


Premium issues and premium listing are two different things altogether. Every company stock has a par value or a face value. This could be Rs.10, Rs.5, Rs.2 or even Rs.1. It is on this par value that the dividends are paid out by the company. When a company comes out with an IPO, the extent to which the price is above the par value of the stock is referred to as the premium on the IPO. When the IPO is at the same price then it is a par issue and when it is at a price above the par value, it is a premium issue.
A premium listing is the actual listing price on the day of listing reference to the actual issue price. The premium listing does not measure the premium over the par value but over the issue price. For example, if a company with a par value of Rs.10, came out with an IPO at Rs.65 and if the shares got listed at Rs.85 on listing date, then it is a case of a premium listing. If the listing is below Rs.65, then it is a discount listing. In case of book built issues, when shares list on the exchanges above the book built price, then it is considered to be a premium listing. If it lists below the Book built price, then it is a case of discount listing.