What do you mean by IPO?

IPO, or Initial Public Offering, is a way for a company raise money from investors to fund its future projects. It also allows the company to be listed on the Stock Exchange. Or an Initial Public Offering (IPO), is the sale of securities to the general public on the primary stock exchange.

Investors have the opportunity to purchase shares directly from the company through IPO. There is often a large difference in the price companies choose to sell shares at and the price investors are willing to pay. This gives an investor a great listing benefit for the shares they receive from IPO.

From a company's perspective, IPO helps them identify their true value. Millions of investors decide their true value once their shares are listed on stock exchanges. IPO's can also help companies pay off their debts or provide funds for future growth.

Or, in other words:

A company's initial public offering (IPO), is when it issues shares or common stock to the public.

This is when a privately-held company is made public by selling its stock. Companies use an IPO to raise capital for future investments. This investment is most often used to grow or improve the company.

An Initial Public Offering (IPO), rights-issue or private placement are all ways for a corporate to raise capital in primary markets. An Initial Public Offer (IPO) is when securities are sold to the public on the primary market. This is the most important source of funds for a company with a long maturity or indefinite. Entrepreneurs seek out the new market because they need funds to finance their business activities. An Initial Public Offering (IPO) allows a company to raise capital to pay for its projects. It also gives the company global exposure through the Stock Exchange.

Companies that are younger than the rest and looking to raise capital for expansion can issue IPOs. Privately-owned companies with larger assets may also issue IPOs. Investors pay money for new securities. This money goes directly to the company. This is unlike later shares trades that move money between investors. A company can access a large number of investors through an IPO to raise capital for future growth or debt repayment.

IPOs can be used both as a financing strategy or an exit strategy. The main purpose of an IPO in a financing strategy is to raise money for the company. IPOs can be used as an exit strategy to existing investors to sell equity to the public via a public offering. The capital received by investors is not repaid if the company sells common shares. A company can issue additional common shares through a secondary offering once it has been listed. This allows it to provide capital for expansion without taking on any debt. Many companies want to go public because they can quickly raise large amounts from the market.

Being a public company has many benefits, including:

• Diversifying and supporting the equity base
• Access to capital at a lower cost
• Public image, prestige, and exposure
• Liquid equity participation helps to attract and retain better managers and employees.
• Facilitating acquisitions
• Creating various financing opportunities:  convertible debt, cheaper bank loans,equity etc.
• Liquidity for equity holders increased