What is IPO ?

vry nice

Very good article... i would say "short and sweet"

An IPO means Initial Public Offer. When a company comes out with a public offer of its shares for the first time it is referred to as IPO. For an IPO the company has to follow various regulations and guidelines of Securities and Exchange Board of India.

Hi Friends,

Its a good article to easily understand the IPO concept.

Still i have some doubts. Kindly clarify this.

1. What is QIBs type of investors and their specialities.

2.What is primary and secondary market?

 

Thanks.

Initial public offering (IPO), also referred to simply as a "public offering", is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value. Reasons for listing: When a company lists its shares on a public exchange, it will almost invariably look to issue additional new shares in order to raise extra capital at the same time. The money paid by investors for the newly-issued shares goes directly to the company (in contrast to a later trade of shares on the exchange, where the money passes between investors). An IPO, therefore, allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital for future growth. The company is never required to repay the capital, but instead the new shareholders have a right to future profits distributed by the company and the right to a capital distribution in case of a dissolution. The existing shareholders will see their shareholdings diluted as a proportion of the company's shares. However, they hope that the capital investment will make their shareholdings more valuable in absolute terms. In addition, once a company is listed, it will be able to issue further shares via a rights issue, thereby again providing itself with capital for expansion without incurring any debt. This regular ability to raise large amounts of capital from the general market, rather than having to seek and negotiate with individual investors, is a key incentive for many companies seeking to list.

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Nice answered by Mr DM ,Mr Shirin bhatt and Mr bijoy. The way Mr DM has provided the info is very nice.

IPO IT MEANS WHEN A COMPANY RAISES SHARE CAPITAL FROM PRIMARY MARKET .

ALSO TO BE ADDED IT SHOULD BE FIRST TIME

OTHERWISE SECOND TIME OR LATER ON IT IS CALLED FPO- FOLLO ON PUBLIC OFFER

hi..............................

Thank u Sir for the Value addition

Originally posted by :gemini
"	Hi Friends, Its a good article to easily understand the IPO concept. Still i have some doubts. Kindly clarify this. 1. What is QIBs type of investors and their specialities. 2.What is primary and secondary market?   Thanks.	"

 

QIBs are Qualified Institutional Bidders. Simply to say, these are institutions which have high investments in different securities. However, I would also like to know more about it.

Primary market is that where new shares. bonds etc. are issued, like in the case of IPO and FPO, while secondary is that where already issued securities are traded, like stock exchanges.

 

Sir,

Wat s the diff between primary and secondary market

Factors To Consider Before Investing In IPO’s. IPO’s or initial public offering is best understood as the first public offering of shares by a private limited company before listing in a stock market. Looking down IPO’s history of success and failure stories, you would be smart to first fully understand the various aspects behind such offerings and makes the right choice to invest or not in IPO’s. It is advisable to understand that investing in IPO’s could prove risky with unfavorable market situations and sentiments and when the fundamentals of the company and industry are weak. It is best to go by facts, avoid being influenced by rumors and have a closer look at the past performances also. https://www.holisticinvestment.in/before-investing-in-ipo Regards Ramalingam K, MBA, CFP, Director and Chief Financial Planner, Holistic Investment Planners “Best Performing Financial Advisor Award” Winners from CNBC TV18 www.holisticinvestment.in (Follow us on) https://www.facebook.com/holisticinvestmentplanners