What is an IPO?
When private companies i.e. companies that are wholly owned by their promoters, invite the public to subscribe to their shares, this issue of shares is called an Initial Public Offering (IPO). The shares issued could be in the form of fresh equity and/or the promoters sell a portion of their equity to the public. These shares are then listed on a stock exchange where they can be bought and sold by investors. IPOs are a very popular way of investing in the stock market as they allow investors a simple entry route to buying stocks.
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