The decision to list a company is often taken considering the market trends. When the primary markets are strong, there is a natural temptation to take a company public. This is because, in a strong market, the company gets much more than its fair valuation. The equation gets reversed when the secondary markets are caught in a bear phase and this has a cascading effect on the primary markets.
An IPO is needed for a company to sell its stock to the general public for the 1st time and get a listing on the stock exchange (a necessary precondition to the trading of securities on an exchange). Companies normally come out with IPOs when they need fresh capital for expansion plans. Private equity investors, many a times, also use IPO as an exit route from the company. Globally, there are three different mechanisms for completing an IPO #pdf
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