IPO Refund

An Initial Public Offering is a mode of financing capital for a company. These Initial Public Offerings can be bought by an individual or by corporate investors. The main aim of such issuance of Initial Public Offering is to invest the corpus for either establishing a new private company or expansion of an existing private company. The shares owned by such financier or investors grants them the right to the company and its future profits. The quantum and type of such rights are categorically mentioned in the offer document. The process of underwriting determines the issue size and type, offer price and best time of introduction into the market.

The underwriting is generally done by the investment bankers. These underwriting firms or investment bankers are allotted some specified numbers of shares to sell to the general investor before the share is being traded on an exchange.

IPO Refund is disbursed by the merchant bankers to the applicants of Initial Public Offerings. In India, these IPO Refunds are generally made through electronic clearing services for pre-designated numbers of centers. The clearing houses that are also involved with the process of IPO Refund are controlled by the apex bank of India, The Reserve Bank of India. The directives on the IPO Refund money are issued by the Securities and Exchange Board of India (SEBI). The directives on the IPO Refund money are laid down as per the "Disclosure and Investor Protection Guidelines, 2000" formulated by the Securities and Exchange Board of India (SEBI). These IPO Refunds are also made by direct credit and real time gross settlement (RTGS), as per the laid down eligibility criteria of the applicant. For applications, which are made completely in the dematerialized form, the relevant details of bank account of the IPO applicant are taken from depositories.