listing price

The listing price is the price at which the first trade on the exchange takes place. Generally an allottee from the IPO has in mind a determined price at the time of the opening day and he puts a sell order at that price and a buy bid is sent from another person. The first such matching of price makes it the first trade for the scrip and that is the price at which it trades for the first time and that determines the listing price.

Dear Aditya, 

Many many thanks for such a beautiful answer.

Thank you Aditya Sir for info.

I would like to know, suppose 2 person make selling bid @ Rs 250 & Rs 290. At the same time different person makes a buying bid for Rs 272. So how price is determined ?? Is it on Average basis or any other basis???

I am asking because in  any listing there will be thousand of buying & selling bid. So how a final price is chalked out???

My another question , the listing price say Rs 292 will it always be in price band range??

Dear Faiz,

Your query

I would like to know, suppose 2 person make selling bid @ Rs 250 & Rs 290. At the same time different person makes a buying bid for Rs 272. So how price is determined ?? Is it on Average basis or any other basis???

The answer would be the price would be Rs. 250/- only as there is matching of buy and sell order though the buyer wants to buy at Rs. 272/- seller is standing at Rs. 250/-. In the current case of listing time the first person to execute the buy and sell order determines the price. If generally happens on listing day that buy order is a market bid and a sell order is at a determined price as per the sellers intented price.

Sometimes it even happens that the buyer keeps a lower price and the seller in the maket sells at market price. Like it had happened in case of listing of Cox & Kings Ltd. where though the issue price was Rs. 330/- it lists at a discount i. e. it had listed at around Rs. 306/- whereas at the end of the listing day it closed above Rs. 425/-. It is due to change in the position of buty & sell and matching of orders. Whoever firsts trades that determines the listing price.

Ok nice explanation. Thank you sir for enlightening us.

Thanks Aditya Sir For NIce Clarification...

Thanks Aditya Sir For NIce Clarification...

thx sir,but what if buy n sell orders dont match. I mean an investor will never put a sell order below the issue price whereas the buyer will try to get the scrip at the lowest possible price,how will then iyt be decided..

Agree with Mr. Aditya

Really nice replies.....