What Is an Initial Public Offering (IPO)?

An initial public offering (IPO) relates to the method of offering shares of a private company to the public. It allows a firm to raise funds from public investors. The change from a private to a public company can be a great time for private investors to completely realize gains from their investment as it Mainly includes share premiums for current private investors. 

KEYNOTES:

  • An initial public offering (IPO) means the method of giving shares of a private company to the public. 
  • Private Companies must meet Basic requirements by exchanges & Securities and Exchange Commission (SEC) to operate an initial public offering (IPO).
  • IPOs allow companies to obtain Funds by offering shares through the market.

Should You Invest in IPO?

  • Do Some Research About the Company. Our website IPOGYAN.COM will help you by providing comprehensive reviews on IPO.
  • On our website, we will provide companies details like what is the business of particular companies, etc.
  • We will provide previous financial results.
  • Other useful details like IPOs opening and closing dates, Price Range of shares, lot size, issue size, etc.
  • As well as we will provide GMP(Grey Market Premium).

Advantages:

  • You can get a premium on shares if you have to get an IPO allotment. For example, if you applied for IPO with a price of 10 Rs. per share and when a share is listed in the stock market at 12 Rs. you will get 2 Rs. premium which is known as share premium.
  • If you hold that share you can also get huge premium.

Disadvantages:

  • Before listing of shares in market if some negative news come in market when stock may be listed at lower price if you compare with price you have applied for example, if you applied for IPO with a price of 10 Rs. per share and when share get listed in stock market price of that stock listed at 8 Rs. per share then you have lost 2 Rs. per share and it is known as Discount.

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