Everything you need to know about Initial Public Offering (IPO)

1. Everything you need to know about Initial Public Offering (IPO) Before we learn, what is exactly Initial Public Offering (IPO) and its process lets us first analyze what is the reason we need them in the first place? Rama has the retail business of Supermarkets. She started with one store and now the number has reached up to 5. She wants to grow her business more and let others enjoy the benefits of her services. Five stores in India was an achievement but is it a success story yet if she wants to expand it? No, a large amount of capital requirement is there to fulfill her dream. She will ask her parents and family to put in extra money, and she will also put her profits and savings into the business but still, the funds are minimal. She was advised to seek assistance from a bank and the bank agreed to provide her capital of Rs 2500000 at 10% interest. The money she required was much more, and she feared what if she is unable to repay the loan? It can impact her hard-earned business. She drops the idea of borrowing debt. She tries to approach an angel investor for her business, and she finds one who invests in her business and takes some part of ownership in return. Rama gets better within the span of 5 years, and now she wants to grow her business even bigger and angel investors also want to exit the ownership and book profits. How will a company move one step further, and how does the public take a part in it? What is IPO? When a company offers its share (ownership) for the very first time, it’s called an Initial Public Offering, abbreviated as IPO. The private company does this to become public and raise funds from the primary market (New issuance of securities). After the listing completion on the share market, i.e., secondary market the shares are freely traded in the market It is an essential step for the development of the company. Rwealth