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IPO-Initial Public Offer

IPO-Initial Public Offer
What is IPO

What is IPO

What is IPO-Initial Public Offer

An IPO or initial public offer, which means that any company when it wants to further its company needs a lot of money. Then the company takes money from the public and gives a share of the company. The same transaction is called an IPO or an initial public offer.

IPO Process-

The company gives its information to SEBI to bring an IPO or an initial public offer. SEBI means that the  Securities Exchange Board of India allows the company to bring an IPO after looking at the company’s information. You can book your bank’s internet banking site to buy an IPO. When an IPO is issued, then anyone who wants to take part in that company has to make a bid.

Be cautious while buying an IPO-

When buying an IPO, it should be cautious because when we buy shares of the company, we have much information. Like the owner of a company, what is the product of the company, what is the demand of that product in the market, the company’s attention in the future, the company has performed first. But when we buy an IPO, we do not have much information as the IPO comes from a new company. That company does not have any more information. This is the reason why more alertness should be taken when buying an IPO.

IPO Investment-

It is good to invest in an IPO because the IPO of a good company is also available at a very cheap price. But when the company’s shares are listed in the securities market with IPO, NSE and BSE, its value increases. But there is also a vigilance, if the company is not good then it may be lower than the value of the IPO. When you buy shares from the IPO, index the information of that company properly. After taking the shares from the IPO, you can sell it in the secondary market. Studies have shown that most of the time after the issue of IPO, the share price is half.

Direct Listing-

When an IPO is organized, the investment bank will buy shares from the issuer. The bank then plans to present those shares on the secondary market, where they will do direct business in the market. Apart from the fees, the bank may be benefited from selling shares on the secondary market at such cost, which is more than the issuance of the shares for the shares.

Alternative Share Offering Strategies

Apart from the IPO. an IPO, there are other ways to share the public, but there may be a better strategy for some companies.

Last Word-

The IPO cannot be considered better. It would be good to buy after listing in the IPO exchange. Then the real value of the market share is revealed.

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