What is the employee category in an IPO?

A company can reserve a certain portion of the issue for its employees. Eligible employees can apply for an IPO through this reserved employee category. The portion of an IPO reserved for employees may not exceed 5% of the paid-up capital after the issue.

The following employees are eligible to apply for IPO under IPO employee category:

• Permanent and full-time employees of the issuing company, subsidiary and group company.
• Employees who are substantially related to the full-time or part-time director.
• An employee of the company whose financial statements are combined with those of the issuing company and who is a material employee of that company.

The IPO prospectus document contains information such as employee reservations, their limits, stock prices and discounts.