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Invest in Initial Public Offerings (IPOs) and follow-ons
At Lloyds, we give our customers a wide range of investment choices. Through our partnership with PrimaryBid, our customers can invest in IPOs and follow-ons. Any shares bought through PrimaryBid can be settled directly into your Lloyds Share Dealing account.
Why invest in IPOs and follow-ons?
What are the risks of investing through PrimaryBid?
Investing in securities involves a significant degree of risk. The potential for loss of capital, lack of liquidity, absence of Dividends, and dilution. Investing should be part of a diversified portfolio.
The value of an investment and the income from it could go down as well as up. The return on your investment is not guaranteed and you may get back less than you originally invested. Past performance is not an indicator of future performance.
It’s important that you read PrimaryBid’s Risk Warnings before considering any investment and read the deal related documents which describe the risks specific to the issuer.
About PrimaryBid
PrimaryBid is a technology platform authorised and regulated by the Financial Conduct Authority that connects individual investors with publicly listed companies when they raise capital
It provides everyday investors equal opportunities to participate in primary and secondary offerings that have historically been restricted to institutional investors
PrimaryBid has offered retail investors access to over 270+ offers in the UK working across the entire UK market (FTSE 100, FTSE 350, and AIM), including listed businesses such as Ocado, Taylor Wimpey, and Aston Martin.
If you don’t already have an account, open a Lloyds Share Dealing account (sign up).
- Create an account with PrimaryBid. Enter your Lloyds Share Dealing account number (note: not an ISA or joint account).
- PrimaryBid will notify you when new IPOs or follow-ons are launched (subject to your notification preferences).
- Place an order through PrimaryBid.
- Shares will be settled to your Lloyds Share Dealing account.
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An initial public offering (IPO) is the process through which a private company offers shares to the public for the first time. It’s often the first chance for individual investors to buy shares in the business.
Companies decide to IPO for different reasons that may include:
- Raising additional capital for expansion and acquisitions.
- Reducing debt or securing preferential terms on borrowing.
- Using their IPO as a way to boost their profile and drive user awareness.
- Attracting and retaining high-quality employees.
- Providing a chance for existing investors, including founders and employees, to sell a portion of their shares.
- Allowing institutional investors, such as private equity firms, to cash out their investments.
- Raising additional capital for expansion and acquisitions.
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What Investment banks advise the company on the number of shares to issue and at what price. The advice is based on a valuation that the company wants to achieve.
To determine the IPO price, the investment bank will invite institutional investors (such as fund managers) to bid. Bids are placed for the number of shares they want to buy and the price they want to pay. This is called “building a book”. The price is generally set where demand and supply meet.
The IPO price is different from the share price that is available for all investors on the first day of trading.
In 2021, Moonpig (the British online greeting card and gift shop) went public with an IPO price of 350p per share. Within an hour, they were at 440p and closed the day at 410p. This was a 17% increase in value for investors who bought the stock at its IPO price.
The opposite can also happen. Shares in Trustpilot (an online customer feedback service) dropped 4.7% 1 day after making its stock market debut at 265p.
Through PrimaryBid, Lloyds customers can buy shares at the IPO price, instead of having to wait for the first day of trading.
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- IPOs may deliver the chance to invest at the early stage of a company’s life cycle when growth is still very significant.
- When a company goes public, it can use the money it raises to fund new product launches. They can also buy other companies and grow into different geographies. Sales and profits may accelerate as a result.
- To make sure there is demand for new shares, IPOs are sometimes priced at a discount to their intrinsic value versus comparable companies.
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- Early entry for investors: For younger companies, IPOs give investors the chance to invest early in a company's life cycle. Investors can get in at the “ground floor” and benefit from growth that may happen as the company becomes more established.
- Clear pricing: Publicly traded companies must report financial information regularly through quarterly or half year earnings reports (depending on the listing venue) and trading updates. This means investors can see how well these companies are performing financially. Knowing how well a company is doing helps investors decide whether they should continue holding their shares or sell them.
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- Price volatility: Once publicly traded, supply and demand sets the share price. Shares could have been mispriced and could rise or fall. Volatility can be high, especially if the company performs differently to expected at the time of the IPO.
- Higher risk of loss: Despite a detailed disclosure of information to the public, there is still uncertainty whether a company’s management will perform and deliver their strategy. Potential investors should carefully consider the risk factors highlighted in the disclosure document before investing.
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A follow-on is the offering of additional shares once a company has already completed its IPO and is publicly trading on an exchange. There are many reasons why a company may raise additional capital:
- To raise cash to repay debt.
- Fund acquisitions.
- To invest money and help the company grow.
Investors should consider the reasons why a company is raising money before deciding to invest.
Follow-ons are often conducted through an accelerated book build (ABB). This involves a bank seeking orders from investors over the course of a matter of hours or a day. Shares are usually sold at a discount to the prevailing share price.
- To raise cash to repay debt.
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When a company issues additional shares, it is “diluting” existing shareholders' interests, which means the proportionate ownership of any given investor is reduced.
Investors should keep track of a company's share count. A rising share count makes it harder for Earnings Per Share (EPS) to grow at the same pace as net income, as the earnings will be spread over a greater number of shares.
As more shares are issued, existing investors will own a smaller proportion of the company. The proportionate claim they have over assets, earnings, and dividends reduce if they do not buy new shares in issuance to maintain their relative position.
EPS is a metric commonly used by investors to value a stock or company. It indicates how profitable a company is on a per-share basis by subtracting any preferred dividends from its net income and dividing that amount by the number of shares outstanding.
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Participation in a follow-on prevents the dilution of an existing shareholding.
- It offers the chance to maintain your proportionate holding, often at a discount to the market price.
- If a follow-on is priced at a discount to encourage participation, it may be a good time to begin building a position in a company.
- Investors benefit from zero commission and no stamp duty when they buy shares in a follow-on.
- The capital that a follow-on gives may result in a better outlook for the company.
- The company can reduce debt and financial risk or accelerate growth through increased capital spending or acquisition.
If you’re interested in investing in follow-ons, sign up with Primarybid.
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PrimaryBid is a regulated capital markets technology platform connecting public companies to retail investors during fundraising activity. They provide investment opportunities that have historically been restricted to institutional investors.
PrimaryBid doesn’t hold stocks and shares on its platform; any stock purchases can settle to your account with Lloyds.
PrimaryBid has offered retail investors access to over 270+ offers in the UK since it was founded in 2016. PrimaryBid works across the entire UK market (FTSE 100, FTSE 350, and AIM), including listed businesses such as Ocado, Taylor Wimpey, and Aston Martin and seeks to promote retail investor inclusion when these companies raise capital, whether that is via IPO, follow-ons, or retail bonds.
PrimaryBid Limited is authorised and regulated by the Financial Conduct Authority (FRN 779021) and is a limited company registered in England and Wales (No. 08092575) with its registered office at Fifth Floor, Office B3, 80 Victoria Street, Cardinal Place, London SW1E 5JL.
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Follow the link to sign up for an account with PrimaryBid. PrimaryBid will perform some simple checks and ask a few questions before you can take part in their offers.
When signing up for a PrimaryBid account, you’ll be asked for the following information:
- name
- address
- email address
- telephone Number
- date of birth
- nationality
- National Insurance number
- Lloyds Share Dealing Account number (please note that your Lloyds account should be a General Investment Account in your sole name and not an ISA account)
- name
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We’re partnering with PrimaryBid to give you the chance to invest in IPOs, follow-ons, and bonds. When you set up an account with PrimaryBid, you can link your Lloyds account. That way, any shares purchased can settle directly into your account.
Once you’ve signed up for a PrimaryBid account, provided you opt in, PrimaryBid will notify you of new offers by email and/or push notification (if you choose to).
PrimaryBid allows you to view company offerings, look through transaction information, and place an application for shares, provided you’re in the United Kingdom. Any applications made through PrimaryBid will need to be paid for using a debit card.
Once the offer has closed, you’ll be emailed a confirmation of your allocation. Your shares can be settled to your Lloyds account on the admission date.
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- Open an investment account with us.
- Follow this link to open an account with PrimaryBid.
- During onboarding, enter your Lloyds share dealing account number to allow shares to be settled directly to your Lloyds account.
- See which offers are available.
- Place your order through PrimaryBid.
- Shares can be settled to your account with us.
- Open an investment account with us.
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If the total amount applied for by individual investors exceeds the amount allocated to PrimaryBid, investors may receive fewer shares than they applied for. You’ll be notified if you’re scaled back in the allocation email. The email is sent to the address registered to your PrimaryBid account once the results of the offer are announced.
You’ll receive details of your allocation once the issuing company has announced the results of the offer. Usually this is within 24 hours of the offer closing, although this can take longer in some instances.
Any decision to scale back applications will be made at the discretion of the company raising funds with PrimaryBid. Information on the scale back is included in the Regulatory News Announcement of Results for each PrimaryBid Offer.
If you’re due a refund, you should expect to receive this within 5 business days of the allocation announcement. This will be returned to the same debit card that you used to apply to the PrimaryBid offer.
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The earliest time you’re able to receive your shares or bonds to your Lloyds account is on the admission date. The timing of transfers may vary.
The date your new shares or bonds get issued is the “admission date” and the issuing company decides this. The admission date is in your allocation email and the conditions section within the offer section of the PrimaryBid App.
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Once the shares have settled into your Lloyds account, you can sell these shares through the Lloyds app or desktop.
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When an application for shares has been made and accepted by PrimaryBid it can’t be withdrawn. We don't offer refunds on applications unless investors have been scaled back.
Please make sure you read PrimaryBid’s terms and conditions and the offer details carefully before applying for shares or bonds.
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Investing in securities involves a significant degree of risk. The potential for loss of capital, lack of liquidity, absence of Dividends, and dilution. Investing should be part of a diversified portfolio.
The value of an investment and the income from it could go down as well as up. The return on your investment is not guaranteed and you may get back less than you originally invested. Past performance is not an indicator of future performance.
It’s important that you read PrimaryBid’s Risk Warnings before considering any investment and read the deal related documents which describe the risks specific to the issuer.
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Transactions in the primary market are generally exempt from stamp duty reserve tax (SDRT). Since 2014, AIM-listed shares or bonds are exempt from SDRT when traded in the secondary market.
Please note: the tax treatment of all investments and the value of any tax reliefs available depends upon individual circumstances and may be subject to change. Investors should speak to their own tax adviser. Levels and bases of taxation may change.
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Please contact PrimaryBid via https://primarybid.com/uk/contact-us for any questions or complaints with the following:
- Onboarding to PrimaryBid.
- Offers.
- Submitting an order.
- Allocation.
- Settlement.
Please contact Lloyds if there are any issues once the shares have been settled to your Lloyds account.
- Onboarding to PrimaryBid.