IPO listing day: the special pre-open session and when trading starts

On the listing day (T+3) the shares do not start trading at the issue price. The opening price is discovered in a special pre-open session run as a call auction.

The session

• Orders can be placed, changed and cancelled in the first part of the session, from 9 am to 9:45 am.
• The exchange then matches orders at the equilibrium price: the single price at which the most shares can change hands.
• That price is the listing (opening) price. Normal trading starts at 10 am.
• If NSE and BSE discover prices far apart, a common equilibrium price is worked out from both.

Price bands

After the session the shares trade within a price band set by the exchange for the listing day, which depends on the issue's size; SME issues have their own band. The exchange's circulars for each listing state it.