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IPOs or Initial Public Offering gained a lot of news with some supergiants like One 97 Communications Ltd (NS:) entering the market.
The process of issuing shares of a private firm to the public in a fresh stock issuance is known as an initial public offering (IPO). Initial public offerings allow companies to raise funds by selling shares on the primary market. The ‘issuer,’ or corporation that sells shares, does it with the support of investment banks.
It could be a new, young firm or an established corporation that decides to list on a stock exchange and therefore becomes public. When an unlisted firm seeks to generate capital for the first time by selling securities or shares to the general public, it launches an IPO. An initial public offering can be viewed as a way for the company’s founders and new investors to profit fully from their private sector investment. Investors in India can apply for IPO Stocks by filling out an online IPO application provided by stockbrokers and banks. UPI-based online IPO applications are available through brokers, and banks offer both UPI and ASBA IPO applications. The company’s shares are traded on the open market after the IPO. Investors can sell their shares on the secondary market for a profit. The first is the offering’s pre-marketing phase, and the second is the actual first public offering. When a company wants to do an IPO, it will either request private bids from underwriters or make a public declaration to attract interest.
Increased transparency, such as that provided by compulsory quarterly reporting, can usually assist a public corporation to obtain better credit borrowing conditions than a private one. Companies may face a number of drawbacks to going public, prompting them to consider other options. The fact that IPOs are costly, and the costs of sustaining a public company are ongoing and largely unrelated to other costs of conducting business, are just a few of the key drawbacks. A corporation that sells its stock to the public is not obligated to reimburse the funds invested by the public.
Purchasing an initial public offering (IPO) stock can be enticing. A block of common stock purchased at an IPO has the potential to generate massive capital gains decades down the road. In a few decades’ time, even the annual dividend income of a very successful company can exceed the initial investment amount.
Some Upcoming IPOs for 2022
Mobikwik: This Indian Giant based on providing Payment Services is ready to step into this game very soon.
LIC: This Supergiant is gaining all the ‘deserved’ attention for its expected IPO in 2022. The IPO is projected to be worth between Rs 70,000 and Rs 1 lakh crore.
BYJU’s: This Edtech behemoth is about to launch its first public offering. According to reports, the public offering will help the corporation raise $40-$45 billion.
Swiggy: Instamart, an online grocery delivery platform, was developed by an online food delivery company. It is scheduled to undertake its initial public offering (IPO) before the end of 2022.
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