IPO:                                                                                               Depository | Mutual Funds| Equity| Derivatives
An initial public offering, or IPO, is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO. Companies fall into two broad categories:-Private and Public.

A privately held company has fewer shareholders and its owners don't have to disclose much information about the company. Anybody can go out and incorporate a company. Most small businesses are privately held. But large companies can be private too. It usually isn't possible to buy shares in a private company. You can approach the owners about investing, but they're not obligated to sell you anything. Public companies, on the other hand, have sold at least a portion of themselves to the public and trade on a stock exchange. This is why doing an IPO is also referred to as "going public."

Public companies have thousands of shareholders and are subject to strict rules and regulations. They must have a board of directors and they must report financial information every quarter. From an investor's standpoint, the most exciting thing about a public company is that the stock is traded in the open market, like any other commodity. If you have the cash, you can invest.

Some of the reasons why companies go for an IPO are as follows :-
  • Additional Capital resources for funding of projects/expansion plans.
  • Dilution of existing promoters share holding.
  • Listing enhances corporate image thus providing visibility
To apply in an IPO, one needs to have a demat account.PAN copy is required in case the application amount is equivalent or more than Rs.50,000/-.Basic details such as name of the investor, address, bank details and the contact details need to be provided. As per the regulation any public issue of size in excess of Rs.10 crore are to be made compulsory in demat mode.
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