Generally, the life cycle of an IPO consists of the following stages:-
Identifying and employing an Investment Banker to prepare the company for the IPO process, determine the amount to be raised, establish the offer price, and create an underwriting agreement.
Conducting a due diligence exercise that includes investigating and verifying the accuracy of the company's financial and other information. This is a holistic activity that covers financial reports, regulatory compliances, legal structure, etc.
Drafting the IPO prospectus – also known as the Draft Red Herring Prospectus (DRHP). This document contains all the relevant information about the IPO offering and the company’s history, business model, growth plans, operations, performance, financials, strengths, and risks, etc.
Seeking approval from SEBI by submitting the DRHP and declaring the intention to take the company public.
Organising roadshows to generate excitement and buzz in the investor community regarding the future prospects of the company and its upcoming IPO and drive the price and subscription of the offer.
Setting the price of the IPO using the fixed price or the book-binding method. At the end of this stage, the company determines the cut-off price, which is the final price at which the issue will be sold.
Allocating shares based on successful bids and determining the number of shares that are to be allotted to each bidder.
Listing the shares on the stock exchange completes the IPO life cycle.