Share issues and IPO subscriptions

Take advantage of upcoming share issues – such as IPOs and equity placings – by opening a share dealing account with us.

Why subscribe to IPOs and placings with us?

Discover more opportunities

Explore our diverse range of new listings and placings

Get ahead with PrimaryBid

Take your position at the same time and price as institutional investors

Keep up to date on the latest IPOs

Read analysis on upcoming IPOs from our in-house experts

Pay no additional charges

Deal commission free on all IPOs and placings with our partner PrimaryBid

How to invest in share placings and IPOs

Open your account

It's free to open an account, normally takes less than five minutes, and there's no obligation to fund or trade.

What is a share issue and how does it work?

A share issue is the process by which companies release new shares onto the market for investors to buy and sell.

The process of a share issue will work in a similar way whether it’s the first, second or third time a company is releasing shares. The issue would be distributed by a financial institution on behalf of the company – this is known as underwriting. Once the listing is agreed, the offer documents are prepared and distributed to investors. Underwriters then gauge the demand for a stock and issue the shares to investors.

The main difference between the types of share issues are whether they are primary or secondary issuances. The most common types of share issues are:

  1. Initial public offerings (primary)
  2. Equity listings (secondary)

To take your position on share issues, open a share dealing account with IG.

1. Investing in IPOs (primary issue)

An initial public offering (IPO) is the process of a company listing its shares on a stock exchange for the first time. It’s the first opportunity for non-private investors to buy the company’s shares in what is known as the primary market – a transaction between the original holder (the company) and an investor.

The underwriter will help a company decide how many shares it wants to issue and at what price. At which point the underwriter – normally a bank – will start a book building process, looking for investors to subscribe to the IPO. Any interested parties would receive a prospectus of information about the shares, where they’ll be listed and the potential opening price.

Previously for retail investors, there have been restrictions on IPOs that mean they can only participate fully in the secondary market – when shares are exchanged between investors. However, you can now invest in initial public offerings at the same time and price as institutional investors, thanks to PrimaryBid.

Ready to invest in IPOs? Open a share dealing account today.

Once the issue has been listed, the secondary market begins and share prices are governed by market forces rather than the company’s prospectus. At this point, you can invest in shares directly through your share dealing account.

What is an IPO subscription and how does it work?

An IPO subscription is an indication that you’re interested in purchasing shares once they have been listed. A company will offer a subscription out to buyers – mainly to institutional investors, but more recently retail subscriptions are possible via certain brokers.

Subscription rates can have a direct impact on the initial share price. IPOs are often under-priced to ensure that the issue is fully subscribed or even oversubscribed by investors.

Oversubscription means there is more demand than the number of securities issued, so the prices can be adjusted upwards and you could be allocated fewer shares than you requested.

Undersubscription would mean the supply of securities is not fully met by the demand – often because the security is overpriced.

Create an IG account to subscribe to IPOs.

2. Investing in equity placings (secondary issue)

An equity placing is commonly used by companies – both public and private – to raise additional capital. They issue shares directly to the most suitable buyers – this doesn’t necessarily have to be existing shareholders.

Shares are offered to individuals, usually at a lower price than the current market level to encourage investment. The size of the discount would vary depending on how many shares are on offer.

Equity placings are often offered directly to institutional investors rather than retail clients. However, our partnership with PrimaryBid enables you to invest in follow-on offerings.

To start taking advantage of these unique opportunities, create an account.

FAQs

You can find your share dealing account ID by logging into your My IG and selecting the ‘live accounts’ tab. Depending on how many accounts you have with us, you may need to change the account you are viewing to your share dealing account as you won’t be able to supply an ISA, SIPP or leveraged number to open a PrimaryBid account. You should see your share dealing account ID straight away on the left-hand-side panel.

Share placings are usually offered at a lower price, to encourage investment. The size of the discount would vary depending on how many shares are on offer. When you invest in share placings and IPOs with us, you’ll always be getting the best price available – plus, you won’t be charged a commission for IPO and placings positions with our partner PrimaryBid.

It’s unlikely that an IPO would impact existing shareholders, as the only shareholders in a private firm would likely be the founder or a private equity firm – so an IPO would be a means to raise additional capital for them.

However, placings can dilute the shareholdings of existing investors, as there are a higher number of shareholders to distribute profits between. This is why pre-emption rights exist – to give these shareholders the chance to refuse the issue of new shares. However, not all placings incur dilution, so it’s important to do your research.

Companies issue new shares in order to raise more money for the business. Broadening the investors that are able to participate in IPOs and other new issues means that companies will have a deeper pool of capital that they can tap into.

PrimaryBid is an investment platform that connects companies with retail investors. This gives everyday investors equal opportunities to participate in primary and secondary offerings that have typically been restricted to institutional investors.

  1. Open a share dealing account with us
  2. Head over to PrimaryBid and create an account
  3. See which issues and IPOs are available
  4. Place your order through PrimaryBid
  5. Enter your IG share dealing account ID to receive shares directly into your portfolio

You’ll find your account ID in our platform, under the live accounts tab.