A company is going public. You want to invest. What happens next?
An IPO (Initial Public Offering) is when a company offers its shares to the public for the first time.
Instead of buying shares on the stock market as you normally would, you first get a chance to request shares before trading begins.
Here's how it works.
Step 1: A company announces its IPO
The company announces that it's offering shares to investors.
Before deciding to invest, ask yourself:
What does the company do? Do I understand how it makes money?
Why is it selling shares? Is it raising money for the business (Primary IPO), or are existing owners selling some of theirs (Secondary IPO)? Or is it a mix of both (primary and secondary?
How much does a share cost? Do I think it's worth that price?
Step 2: You request your shares
For a limited time, you can place an IPO order on Thndr. This is called the subscription period.
Example
Say a company is offering shares at EGP 20 each.
You request 100 shares.
Your total order is EGP 2,000.
But here's the important part:
Requesting 100 shares doesn't mean you'll receive 100 shares.
Your order will remain Pending throughout the subscription period. This is normal and doesn't mean there's a problem with your order.
During this time, investors are still submitting their requests. No shares have been distributed yet.
Once the subscription period closes, the company determines how many shares each investor will receive. This is called allocation.
Only after allocation is complete will you find out how many shares you're actually getting. You may receive all, some, or none of the shares you requested.
Step 3: Some of your money is put on hold
When you place your order, Thndr sets aside part or all of the money needed. This is called blocking funds.
Think of it as reserving money for your possible purchase.
The money is still yours.
You can't use the blocked amount for something else.
The amount blocked is 25% of your IPO order.
Example
Say a company is offering shares at EGP 20 each.
You request 100 shares.
Your total order is EGP 2,000.
The IPO requires 25% upfront, an EGP 2,000 order would temporarily block an amount of EGP 500 until the subscription period ends, or until you cancel your IPO order.
After the subscription period ends, if you receive all the shares you requested, you will still need to pay the remaining EGP 1,500.
Step 4: You find out how many shares you're getting
Once the IPO subscription period closes, the shares are distributed among investors. This is called allocation.
Here's the catch: sometimes more people want to buy shares than there are shares available. That's called oversubscription.
Imagine a concert with 100 tickets, but 1,000 people want to attend. There simply aren't enough tickets for everyone.
IPOs can work similarly.
Example
The IPO is 10 times oversubscribed.
You requested 100 shares.
You might receive only 10 shares.
You pay for those 10 shares.
Any money you set aside that you no longer need is released back to your wallet.
The exact number of shares you receive depends on the IPO's allocation rules.
You only pay for the shares you're actually allocated.
Step 5: Your shares become available to trade
Once the shares are allocated and the company starts trading on the Egyptian Exchange (EGX), you can follow the stock on Thndr.
From that point, its price can move up or down, depending on what buyers are willing to pay and sellers are willing to accept.
If you received 10 shares at EGP 20 each:
At EGP 25, your shares are worth EGP 250.
At EGP 15, your shares are worth EGP 150.
You can choose to hold your shares or sell them.
Remember: An IPO isn't a guarantee that a stock will go up when trading starts.
Step 6: What if the share price falls below the IPO price?
Some IPOs include something called a stabilization fund.
A stabilization fund is a temporary safety net that provides investors the option to sell the shares they received in the IPO at their original purchase price during a limited period, usually 30 days after trading starts.
For example:
You subscribed to an IPO and were you received 10 shares at EGP 20 each.
After trading on the stock started, the share price dropped to EGP 17.
With a stabilization fund you can sell your shares back at EGP20 within the first 30 days of trading and not experience any losses.
But there are a few important rules:
Not every IPO has a stabilization fund.
Stabilization funds apply only to shares received through the public offering.
You must meet the eligibility rules and follow the required process before the deadline.
A stabilization fund doesn't stop the share price from falling. It offers eligible investors a specific way to sell at the original price for a limited time.
Your IPO cheat sheet
What you see or hear | What it actually means |
IPO announced | A company is offering shares to the public |
Subscription open | You can now request IPO shares |
Pending allocation | Your order has been submitted, but your shares haven't been assigned yet |
Subscription closed | You can no longer request IPO shares |
Allocated | You now know how many shares you're getting. This happenes after the subscription period ends |
Oversubscribed | Investors requested more shares than are available |
Refund / Funds released | Money you don't need for the purchase is made available again |
Trading started | You can now buy and sell the shares for this newly listed company on the stock market |
Stabilization fund | A temporary option for eligible investors to sell at the IPO price should the share price fall after trading starts. |
Three things to remember
Placing an IPO order isn't the same as buying the shares. You're requesting them.
You might receive fewer shares than you requested. The rest of your reserved money is released, subject to any amount still due.
An IPO is still an investment. Prices can go up or down, and a stabilization fund isn't always available.
The golden rule: Only request shares you can afford to pay for in full, even if the IPO is expected to be popular.