The listing price of a stock

Question

I was creating python model of hypothetical stock with market cap MC having S outstanding shares whose current price is CP. the intention was to create a chart for technical analysis and understand the support and resistance. However, I'm stuck how to set the price CP. For that I want to understand IPO of a company.

• Question

There is a company C who is going to be listed but before listing OS shares are being offered at $P_{intial}$ now here I want to understand what factors will decide it's listing price. As, I have seen sometimes listing can give you negative returns.

Let say LIC offered it's shares at price of 904 now it was seen listing was less than of 904 but I've also seen some stocks for which listing was greater than price offered in IPO.

Answer 1

The listing price (a.k.a. IPO price) can be negotiated right up until the night before trading opens. The investment banks handling the IPO and the listing company negotiate both price and number of shares to be initially offered.

The negotiations end and the IPO price is decided and shares are sold by the listing company to the investment banks' clients. Later, a stock exchange opens trading on the stock, which sets an opening price. This price could be different than the IPO price. At the end of the trading day, the first closing price for the stock will occur. This price could be different from both the IPO and opening prices.

https://en.wikipedia.org/wiki/Initial_public_offering#Procedure