What is an IPO or Initial Public Offering?

  • IPO or Initial Public Offering is the process through which a private company goes public by offering its shares to the public for the first time. The name of the Company gets listed on stock exchange. It can be a new company or an old company that thinks of going public by selling its shares.

    Reasons for raising IPO by companies:

    • Raise funds for expansion of its business and services, invest in infrastructure or repay loans etc.
    • Increase liquidity
    • Adds to its credibility
    • Open new doors for mergers and acquisitions

    As an investor, you should keep in mind the following points while putting your money in an IPO:

    • Check the Red Herring prospectus for the IPO details and fund utilisation plans.
    • Be cautious and go through the fine prints before putting money.
    • Analyse the credit background and company's financial performance.
      You don't have to become a financial expert. Just get a brief idea of the basics to make yourself financially aware of where you are investing your money.

  • IPO (Initial Public Offering) is a great way of raising funds by a private comapny from the public sector for the first time. It helps the buainess to elaborate and widen its wings in its respective field. A challenging way as well, as it is really difficult to attract people for investments.

  • Banned

    IPO or Initial Public Offering is an excellent way of involving the mass public within your company. This is a good way of expanding your horizons. The money generated through it can be used for expanding the companies operations. But before launching an IPO, the PR team needs to run a strong campaign.

  • @arribe Any idea how to select a good IPO? We hear of so many new IPOs but get confused which one to select. As a retail investor, what crucial points one needs to consider before putting money in IPOs? Any experiences you can share.

  • @harleen As a retail investor, choosing an IPO seems to be a difficult task especially for me. Company raises funds through an IPO. But, it's not easy to select the best IPO. I have heard that one needs to be cautious while putting money in IPOs. Is it true and to what extent? Not every IPO is a good choice. So, how to decide which IPO to subscribe? If an IPO is oversubscribed on day 1 does that mean its doing fairly good? I have very less idea on IPOs, mentioned what info I have gathered from friends. Can anyone guide in this.


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