What is an Initial Public Offering (IPO)?

An Initial Public Offering (IPO) is the process through which a private company becomes public by offering its shares to general investors for the first time. Through an IPO, the company raises capital to fund its expansion, reduce debt, or meet other financial needs. Once the IPO is launched, shares are offered at a fixed or price band through stock exchanges like NSE or BSE. Investors apply during a specified period, and after allotment, the shares get listed for open market trading. IPOs give investors an opportunity to own a stake in a growing company, while the company gains visibility and financial strength.