IPOs & News Issues: Frequently Asked Questions

IPOs & News Issues:
Frequently Asked Questions

FAQ about IPOs:

FAQ about New Issue Retail Bonds:


FAQ about IPOs:

What is an IPO?

IPO stands for Initial Public Offering and can also be referred to as a 'flotation'. Generally, it marks the first sale of stock (shares) by a privately owned company in order to gain listing on the stock market. It can also be the issue of additional shares in an existing company. Any funds raised by an IPO go directly to the company.

How do IPOs work?

Before any official announcement is made, there tends to be a lot of press commentary around companies who could be about to issue an IPO or 'float' on the stock market.

There are typically 5 stages to an IPO:

  • Intention to Float
  • Price range and Prospectus announced
  • Offer Period
  • Offer Closes and final pricing and allocation confirmed
  • Trading

What is an Intention to Float (ITF)?

Before any official announcement is made, there tends to be a lot of press commentary around companies who could be about to issue an IPO or 'float' on the stock market.

The initial announcement comes from an ITF (Intention to Float) notice to a recognised stock exchange such as the LSE. The ITF announcement typically includes the company's investment highlights and details of who can invest, i.e. institutions, professional investors and/or private retail investors.

During the ITF stage, no orders can be taken at this time, however investors can register interest with a Stockbroker such as Barclays, who is taking part in the IPO. They will keep investors informed about the offer timings and when the IPO offer officially launches.

What is an offer period?

When the IPO is launched, the company will publish their approved Prospectus, Pricing Notification and Summary Prospectus. At this time, the company will confirm the 'offer period' of the IPO. This is the period of time which investors have to invest at the launch price before the company shares are launched on a recognised stock exchange such as the LSE. The company will not have a defined price at this stage, however the Pricing Notification will give a guide range of the stock's expected price but this is never guaranteed and could be higher or lower than indicated.

The 'offer period' is an indication only and the offer can close early due to high demand.

Please note, investors should only invest in an IPO once they have read the Prospectus and fully understand the risks involved.

Back to top

When will I know how many shares I have been allocated and the price?

Once the offer period closes and all applications have been processed, the final price of the shares and the allocation policy will be announced by the company. This usually happens within 48 hours of the offer closing.

If an offer is oversubscribed, investors may receive less than they requested, this is also known as scale-back. This depends on supply and demand and will often be set out in the company's allocation policy. In instances where no set policy is provided, Barclays will use their own allocation policy.

Investors who apply through an authorised Broker, such as Barclays Stockbrokers, will receive an email confirmation on the day the shares are allocated to accounts.

What is Barclays Allocation Policy?

Read more about the Barclays Allocation Policy.

Can anyone apply to invest in an IPO?

Barclays Stockbrokers accepts applications from UK, Channel Islands (Jersey or Guernsey), or Isle of Man residents.

If investing through a Company Dealing Account, the firm's jurisdiction of incorporation must be in the UK, Channel Islands (Jersey or Guernsey) or Isle of Man in order to participate in the offer.

How do I apply to invest?

When the IPO is officially launched and the offer period begins, the company will issue a Prospectus, Pricing Notification and Summary Prospectus. Once you have read these documents and fully understand the risks involved you can then proceed to invest.

Provided you are resident in the UK, Channel Islands (Jersey or Guernsey), or Isle of Man, you can place your investment online or by calling Barclays Stockbrokers on 0800 376 6000 or 0141 352 3636.

Please note, Barclays Stockbrokers only accept new account applications from residents in the UK.

It's important to note before you start, that investing in IPOs carries a significant degree of risk. The value of your investment may fall significantly after the new issue becomes available on the market.

Any decision to invest in an IPO should be made solely on the basis of the Prospectus, Pricing Notification and any other supplementary information. If you are unsure whether an IPO is right for you, then please seek financial advice.

Back to top

Is there a minimum or maximum amount I can invest?

Each IPO has a minimum investment which is typically £1,000 with no maximum. Further details of the minimum investment and any specific valid application amounts will be detailed within the company Prospectus.

Which accounts can I make an application through?

With Barclays Stockbrokers, you can invest through an Investment ISA, MarketMaster, SIPP or Pension Trader Account.

To invest through a Company Dealing Account, the firm's jurisdiction of incorporation must be in the UK, Channel Islands (Jersey or Guernsey) or Isle of Man in order to participate in the offer.

How much does it cost to apply through Barclays Stockbrokers?

With Barclays Stockbrokers, investors will not be charged any dealing commission to invest in an IPO. However, Barclays Stockbrokers may receive remuneration from the issuing company, further details will issued in the Terms of Offer once the IPO launches.

Is there a minimum holding period once I have been allocated my shares?

There is no minimum holding period, unless special conditions apply for shareholder benefits which would be outlined by the company in the Prospectus.

Investors can sell their allocated shares as soon as the final allocation has been credited to their portfolio. This typically happens 48 hours from the offer closing and at the point when the company announces the price and allocation policy. No sale instructions can be given before this time.

Back to top

What is 'conditional' dealing?

Once the IPO is closed, the company starts trading on the stock exchange. It will trade like an ordinary share with a buy/sell price being made available. Depending on supply and demand, this can be more or less than the price paid in the IPO.

There is a period of 'conditional' dealing which normally lasts for three days and is linked to the IPO deal settling on the stock market. At this time, some elements of dealing are not available on the stock, such as purchasing within an ISA, as the stock has not officially settled and obtained a full listing on the stock exchange.

During 'conditional' dealing, should the company decide to cancel the IPO, all deals placed in their shares will become void.

How will I know if there are any special benefits provided by the Company for investing in the IPO?

Any shareholder benefits, special discounts and terms will be detailed by the company in the Prospectus.

Are there risks involved with investing in an IPO?

Yes. IPOs can be an exciting investment opportunity for everyone involved, but as with any investment, investors should carefully assess the potential risks and rewards thoroughly.

IPOs can experience high volatility and the share price may fall significantly once they become available on the open market. When investing in any IPO, investors will not be aware of the share price until the offer closes. An indicative range will be provided in the Prospectus and Pricing Notification, however this is not a guarantee and you could end up paying higher than expected.

Any decision to invest in an IPO should be made solely on the basis of the Prospectus, Pricing Notification and any other supplementary information. If you are unsure whether an IPO is right for you, then please seek financial advice.

How can I find out about IPOs available through Barclays Stockbrokers?

You can find information on current and potential IPOs on our website. To stay up to date on current IPOs available through Barclays Stockbrokers, you can register your interest and we will keep you informed of any important information about the offer.

Please note, that not all IPOs are available through Barclays Stockbrokers. This can be down to a number of factors such as size, 3rd party restrictions or open to institutional/professional investors only.

Back to top

FAQ about New Issue Retail Bonds:

What are New Issue Retail Bonds?

When you invest in New Issue Retail Bonds, also known as Fixed Income New Issues, you are effectively lending money to companies in return for a fixed interest payment. Your investment is also repaid on a specified end date.

New Issue Retail Bonds launch on the Order Book for Retail Bonds (ORB) through the London Stock Exchange (LSE). They are usually considered lower risk than investing in the shares of the company. This is because if a company is wound up, bondholders will be paid before shareholders, so there is less chance of losing your money.

However, if the issuer of the Retail Bond fails to meet their obligations, you may get back less than is due to you and no compensation scheme will cover this.

How do New Issue Retail Bonds work?

Companies looking to issue New Retail Bonds will announce to the market that they have launched a new bond, confirming the rate of interest, loan period, credit rating if applicable and any other key aspects of the bond.

The company will also produce a Prospectus and may issue an Information Booklet to support each bond. This gives key information about the bond to investors. You should only invest in a New Issue Retail Bond once you have read the Prospectus and fully understand the risks involved, Any Information Booklet may help you in this regard..

What is the offer period?

At launch, the company will also confirm the 'offer period' of the bond. Similar to equity IPO, this is the period of time investors have to invest before the bond enters the secondary market. The 'offer period' is an indication only and new Retail Bonds can close early due to high demand with only hours notice given to investors in some instances.

How long is the offer period open?

Depending on the company, the offer period can range from between 2-4 weeks. However, the offer period is only an indication and new Retail Bonds can close early at any time with short notice.

Back to top

What happens after the offer period closes?

When the offer period closes, the company will confirm the investor's allocation of the bond and the date it will launch on the market, this usually happens within 24 hours of closing.

When will I know my allocation?

When the offer period closes, the company will confirm the investor's allocation of the bond and the date it will launch on the market, this usually happens within 24 hours of closing. If a new issue bond is oversubscribed, investors may receive less than their original request. This depends on supply and demand and will often be set out in the company's allocation policy. In instances where no set policy is provided, Barclays will use their own allocation policy.

What happens once the bond has launched on the market?

Once the bond has launched on the market, it will trade like an ordinary retail bond and a buy/sell price will be made available. This might be more or less than the price the bond was issues at and will depend on factors such as changing interest rates, company performance and news, as well as the credit rating if the company issuing the bond.

What will the rate of interest be and when will it be paid?

This is announced by the company and details will be included in the Prospectus and Information Booklet.

Back to top

Can anyone apply to invest in a Retail Bond New Issue?

Barclays Stockbrokers accepts applications from UK, Channel Islands (Jersey or Guernsey), or Isle of Man residents.

If investing through a Company Dealing Account, the firm's jurisdiction of incorporation must be in the UK, Channel Islands (Jersey or Guernsey) or Isle of Man in order to participate in the offer.

How do I apply to invest in a Retail Bond New Issue?

When the New Issue is officially launched and the offer period begins, the company will issue a Prospectus and Information Booklet. Once you have read these documents and fully understand the risks involved you can then proceed to invest.

Provided you are resident in the UK, Channel Islands (Jersey or Guernsey), or Isle of Man, you can place your investment online or by calling Barclays Stockbrokers on 0800 376 6000 or 0141 352 3636.

It's important to note before you start, that investing in Retail Bond New Issues carries a degree of risk. You should carefully consider the credit risk of the issuer of new Retail Bonds. If they fail to meet their obligations, you may get back less than is due to you and no compensation scheme will cover this.

Is there a minimum or maximum amount I can invest?

Each Retail Bond New Issue has a minimum investment which typically starts at £2,000 followed by denominations of £100 thereafter. There is no maximum. One share in the bond is equal to £1.

Further details of the minimum investment and any specific valid application amounts will be detailed within the company Prospectus and Information Booklet.

Which accounts can I make an application through?

With Barclays Stockbrokers, you can invest through an Investment ISA, MarketMaster, SIPP and Pension Trader Account.

To invest through a Company Dealing Account, the firm's jurisdiction of incorporation must be in the UK, Channel Islands (Jersey or Guernsey) or Isle of Man in order to participate in the offer.

Back to top

How much does it cost to apply through Barclays Stockbrokers?

With Barclays Stockbrokers, investors will not be charged any dealing commission to invest in Retail Bond New Issues. However, Barclays Stockbrokers may receive remuneration from the issuing company, further details will be issued in the Terms of Offer once the bond launches.

Are there any risks involved with investing in a Retail Bond New Issue?

Yes. The value of bonds can fall as well as rise and you may receive back less than you invested if you sell bonds before their maturity.

Also, if the issuer is unable to make repayment on the Maturity Date or to meet payments of interest as they become due, you may lose your investment or receive less than you are entitled to and no compensation scheme will cover this.

Full details of the bonds, the Issuer and the risks are available in the published Prospectus and Information Booklet. Please ensure you read these prior to investing. If you are unsure of the investments suitability for you, seek independent advice.

How can I find out about New Issue Retail Bonds available through Barclays Stockbrokers?

You can find information on current New Issue Retail Bonds on our website.

Please note, that not all New Issues are available through Barclays Stockbrokers. This can be down to a number of factors such as size, 3rd party restrictions or open to institutional/professional investors only.

Go back to IPO hub

Want to be notified of new IPOs?

Register for emails

Remember:

  • Investing in both types of New Issues carries a significant degree of risk
  • The value of your investment may fall significantly after the new issue becomes available on the market
  • Before investing in New Issues please read our allocation policy.

Ready to invest?

Call our New Issue line on 0800 376 6000* or 0141 352 3636* for more information and to place your order.

New to Barclays Stockbrokers?

If you don't have an investing account with us you can apply online

Open an investment account

IPO guide

Our quick guide is designed to give you useful information about Initial Public Offerings (IPOs).

Guide to IPOs

IPO guide [PDF, 2.13MB]

Please wait …