WHAT IS IPO

IPO

An unlisted company (A company which is not listed on the stock exchange) announces initial public offering (IPO) when it decides to raise funds through sale of securities or shares for the first time to the public. In other words, IPO is the selling of securities to the public in the primary market. A primary market deals with new securities being issued for the first time. After listing on the stock exchange, the company becomes a publicly-traded company and the shares of the firm can be traded freely in the open market.

The company which issues shares to the public is referred to as the issuer. There are two common types of IPO.

Fixed Price Offering

Fixed Price IPO can be referred to as the issue price that some companies set for the initial sale of their shares.

Book Building Offering

In the case of book building, the company initiating an IPO offers a 20% price band on the stocks to the investors. The interested investors bid on the shares before the final price is decided.

IPO is used by small and medium enterprises, startups and other new companies to expand, improve their existing business. An IPO is a way for companies to acquire fresh capital, which in turn can be used to finance research, fund capital expenditure, reduce debt and explore other opportunities. An IPO will also bring in transparency into affairs of the company since it will be required to inform financial numbers and other market-related developments on time to the stock exchanges. The company's investment in various equity and bond instruments will come under greater scrutiny after it gets listed. IPO of any company brings great deal of attention and credibility. Analysts around the world report on investment decisions of the clients.

Investing in an IPO:

Investors betting on an IPO can earn handsome returns if they are wise and have some expertise. The investors can form a choice by going through the prospectus of the companies initiating IPO. They need to go through the IPO prospectus carefully to form an informed idea about the company’s business plan and its purpose for raising stocks in the market. However, one must be watchful and have a clear understanding of analysing financial metrics in order to identify the opportunities.

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IPO NEWS

WhiteOak Capital launches its maiden NFO; to open on July 12
WhiteOak Capital Mutual Fund, the new entrant to the mutual fund space, on Thursday announced the launch of its first new fund ...| July 07, 2022, Thursday
IndiaFirst Life Insurance selects bankers for IPO expected later this year
IndiaFirst will be the fourth private sector life insurer to get listed on the bourses| July 06, 2022, Wednesday
Fund-raising drive on track, majority of the $800 mn received, says Byju's
The firm said its payments to education firm Aakash for a $1-billion deal struck last year have concluded and the audited ...| July 04, 2022, Monday
Corrtech International gets Sebi's go-ahead to raise funds through IPO
Corrtech International, a pipeline laying solutions provider, has received capital markets regulator Sebi's go ahead to raise ...| July 04, 2022, Monday
Tracxn in wait-and-watch mode over timing of proposed public offer
The company will take a call on its listing once the stock market stabilises, according to its founders| July 03, 2022, Sunday
Healthvista India files draft papers for IPO to raise about Rs 1,000 cr
The company is an out-of-hospital healthcare provider with brand Portea| June 30, 2022, Thursday
Edible oil brand Gulab Oils eyes Rs 5,000 crore turnover in four years
Plans to enter ten states from four currently, expand capacity 10-fold to 1,000 tonnes a day and make additions to product ...| June 28, 2022, Tuesday
Natural stone processor Global Surfaces files IPO draft papers with Sebi
The IPO comprises fresh issuance of 85.20 lakh equity shares and an offer-for-sale (OFS) of up to 25.5 lakh equity shares by ...| June 28, 2022, Tuesday
Officer's Choice whisky maker Allied Blenders files Rs 2,000-cr IPO papers
The IPO comprises fresh issue of equity shares worth Rs 1,000 cr and an Offer For Sale to the tune of Rs 1,000 cr by promoter and ...| June 28, 2022, Tuesday
15-yr record in IPO filing with Sebi belies market volatility, shows data
This high number of DRHP filing - or intent shown by companies to go public - paints a bullish picture.| June 27, 2022, Monday