IPO subscription pricing and payment
How does IPO pricing work?
When you make a subscription, you don't know the exact price you'll pay per share, but you will not need to pay more than the cash amount you subscribe for. The company being listed will publish an indicative price range (for example, $40–$50) before the subscription window opens.
Once the subscription window closes, the company will set the final offer price, which is the actual price you'll pay per share.
Your subscription is treated as a market order, meaning that you agree to buy at whatever the final price ends up being, up to the maximum of the indicative range. Note that the indicative price range may change, and that trade price on listing day may be different from the offer price.
Why can't the final price be known upfront?
The final price is determined by overall investor demand, including both retail customers like you and large institutional investors.
The company being listed and their partners facilitating the IPO check how much demand there is at a range of prices and set the final price after the subscription window closes. This is standard for IPO subscriptions globally.
The currency you bid in will depend on the conditions of the IPO.
Where does my money go when I make a subscription?
Your subscription bid is reserved and put aside when you submit your subscription. It's not actually used until the deal is completed, at which point the cost of your allocated shares is deducted and any unused cash is refunded to your investment account.
During this period, which typically lasts several days, you can't use the reserved cash for anything else, including other investments, transfers, or spending. Cash put aside for an IPO subscription doesn't earn savings interest or generate returns of any kind while it's reserved.
Any unreserved cash in your account remains fully available, and you are always free to use it.