An Initial Public Offering (IPO) marks the first time a private company offers its shares to the public on a stock exchange. This crucial event enables...
IPO stands for Initial Public Offering, which is the process by which a private company first offers its shares for sale to the public on a stock exchange.
Companies pursue an IPO primarily to raise substantial capital for expansion, reduce debt, increase public visibility, and provide liquidity for early investors and employees.
While institutional investors and large clients often get preferential access, individual retail investors can participate through brokerage firms that are part of the underwriting syndicate, or by purchasing shares once they begin trading on the open market.
Risks include high price volatility, a lack of extensive historical financial data, potential overvaluation, and the possibility of a share price drop after lock-up periods expire for early investors.