Friends, many of us want to invest in IPO. (Initial Public Offering) Whenever a company wants to re-seize money from the public. So it has to be listed in the stock market which is what we call IPO.
Now we want to invest in IPO, but many of us do not understand its process. We do not even invest in it, we have a lot of share questions that after all, how do we have to do this investment or how is this Shares Allotment done. What is the book building issue, what is the fix prize issue, and what is the investment bank? Friends, definitely read from beginning to end when you will understand. What is an IPO?
Hello friends, I am glad that today in our Technical All India Event, we have told in this article that is what is IPO, I will try to give you complete information about it. Come on friends; let’s talk about what is IPO?
So I will try to tell you the answers to these share questions in this article. So let’s do IPO of friends?
What is IPO: – Now by understanding the “Process” of IPO, first we have to see why they need for “IPO” comes after all. us to any company
Funding Stages will not be understood, so let’s understand.
- Stages 1: – In Stage one, a company starts with Promoter Fund i.e. Funders are saved and take some money from Friends & Family Member.
- Stages 2: – In Stage 2, when the company grows a little, Angel Investor puts some money.
- Stages 3:- Venture Capital & PE comes in Stage 3. The one who puts money
- Stages 4:- Stage 4 is finally coming to the IPO which we call “Initial Public Offering”
What happens in Initial Public Offering? “Stocks Exchange” i.e. “Bombay Stocks Exchange” here again gets a company list on “National Stocks Exchange”. Some investors invest, we call them investors. There are different types of investors. Now it comes to why IPO is required.
The requirement of IPO is simple. If the company wants to race money, it has to race the funds. So this is a very good way to IPO, now this company is private equity i.e. until this listing was not there, some investors had erased the money. But now it is on fire in such states but “Private Investor” cannot give that much money. Now public’s “Help” will have to be taken. Because there are more investors in the public, the number of investors increases. Investors can be tagged.
For example – Mutual Fund, and Pension Fund, have more money. So to tag big funds, IPO is brought. And the main reason for this is.
- Expansion: – Any company wants to expand. So he will need more fund.
- Pare Debt: – Maybe he has taken Debt or Loans, there may be some Labatis, if he wants to end them, then that too will be a money race through IPO.
- Exit to Previous Investors: – As old investors are Angel Investor, Venture Capital & PE, it may be that some of these people should exit from it. When listed on Stock Exchange.
Now we understand the process of IPO? Comes first in the process of IPO.
- Step 1:- Any company wants to take job public issue. She hires an investment bank. Investment bank is also called Merchant Bank. What is an investment bank after all?
For example – ABC toys Ltd wants to be listed on this company’s stock exchange
Show lets Hire XYZ Capital
Now which star is the investment bank, in today’s date, all the major banks are tea, ICICI, or SBI, all of them have their own investment bank arms, which also do “Merchant” or if they bring IPO, then I have come to the bank. It is also a task to bring IPS, now if any company wants to hire any investment bank, then what will it see “Reputation & Track Record” how has it been in running the fund from IPO.
How is the “Quality of Research”, how do you price it, how do you do the valuation, how is the distribution of the company apart from how many institutes with tires or how much can you do marketing to the retail investor, how much to the non-institute null investor Can do good marketing “Prior relationship” Apart from this, there may be a prior relationship, a company may have had some prior relationship with an investment bank, so any company will hire a good investment bank.
When the opening of the IPO closes, the company allocates the IPO. During this process, the company distributes the IPO to all investors, and after the IPO is distributed to the investors, the shares are listed on the stock exchange (STOCK MARKET).
After listing in the stock market, shares are bought and sold in the secondary market. Unless the shares are listed in the stock market, you cannot sell them. Once the shares are listed in the stock market, the money and the shares are exchanged between the two investors.
Once listed, you can also sell and buy shares according to the stock market timing.
The whole process is under the supervision of SEBI (SEBI – SECURITIES AND EXCHANGE BOARD OF INDIA), when any company plans to bring its IPO, then it has to follow all the rules of SEBI. He has to inform SEBI about every little thing from the reasons for bringing the IPO. The company gives a RED HERRING PROSPECTUS to SEBI.
The company in this red herring prospectus:-
- BUSINESS DETAILS
- CAPITAL STRUCTURE
- Risk Factor (RISK FACTOR)
- RISK STRATEGY (RISK STRATEGY)
- PROMOTORS AND MANAGEMENT
- PAST FINANCIAL DATA
This is all information. The Red Herring Prospectus is available on the website of SEBI (SEBI- SECURITIES AND EXCHANGE BOARD OF INDIA). Every company is required to abide by all the terms and conditions of SEBI.
Few things to keep in mind before investing-
Before making any kind of investment, some important things should be kept in mind, before investing the company should also be compared with the rest of the companies. Be sure to read the red herring prospectus of the company that brought the IPO.
I hope you guys have understood what IPO, friends, is if you liked this article of mine, then definitely share what is IPO, about which everyone can get information.