Which of the following statements regarding IPO listing

Solution

When shares are first traded on a stock exchange after an IPO, the price at which they open compared to the allotment price determines whether there is a listing gain or loss. If the opening price is higher than the allotment price, the difference is called a listing gain. • Statement A is true because this is the definition of listing gain. • Statement B is false since over-subscription does not guarantee listing gains; the actual outcome depends on demand, supply, pricing, and market sentiment. • Statement C is false because listing gains are market-driven and belong to investors, not recorded in the company’s financial accounts. Thus, only Statement A is correct.