Hard underwriting
An underwriting commitment made at the initial stages of an IPO, as distinct from soft underwriting, which is given once pricing is determined and carries an exit option on specified events.
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
- Anchor investorA qualified institutional buyer allotted shares a day before a book-built issue opens — at least Rs 10 crore on the main board or Rs 2 crore on the SME exchange — under a discretionary, locked-in allocation.
- Category III AIFThe AIF category for funds running diverse or complex trading strategies with leverage — hedge funds and their kin — and the only category denied tax pass-through status.
- Equity Linked DebentureA debt instrument whose interest is tied to the return on an equity index or basket — the issuer parks most of the principal in bonds to protect capital and spends the rest on options to buy the equity upside.
- NovationThe clearing corporation stepping into the middle of every trade — becoming the buyer to every seller and the seller to every buyer — so that neither side carries the other's default risk.
- RematerialisationThe reverse of dematerialisation — the demat account is debited and the issuer prints fresh physical certificates for the same quantity, to be despatched within 30 days.
Where this is taught
Free preparation for NISM Series XV← All terms