Partner With Us

What is IPO & What are the Advantages of IPO?

An Initial Public Offering (IPO) is the first time a private company's stock is made available to the public for purchase. Smaller businesses seeking more money are more likely to issue initial public offerings (IPOs), although large private companies seeking to go public may also do so. Initial public offerings (IPOs) can also be used to monetise the investments of early private investors.

Rather than selling the business or bringing on new partners, the entrepreneur can list it on a stock exchange.

An initial public offering (IPO) is used to do this (IPO). An initial public offering (IPO) is when a company's stock gets sold to the public for the first time. A young entrepreneurial company most issues an IPO, but older firms or even public sector enterprises may also get issued funds to raise funds from the public.

Here are some of the advantages for the company:

  • Most businesses will struggle to raise money from venture capitalists and other large investors. It is not just a matter of potential investors not being available. Investors may be present, but they may not be willing to give the entrepreneurial venture a reasonable valuation. In such situations, it is prudent to pursue equity support from the public, who might place a higher valuation on the company.
  • When a company gets publicly traded, the public image improves as well. It attracts the attention of suppliers and consumers. It also becomes easier to attract businesses. Furthermore, banks would be more likely to lend to publicly traded corporations than to privately-owned companies.
  • Even private limited companies may issue stock to their employees under Indian labour laws. However, the laws make it very difficult, and the processes are not well structured to help with liquidity. It is very simple to set up employee stock option plans and motivate the employees in public limited companies.
  • Mergers and acquisitions are much easier to do when the business gets publicly traded. Processes become more straightforward, and assessments become more market-driven. As a result, assessment is no longer a major concern.
  • Entrepreneurs may liquidate a portion of their holdings by listing their business. Additionally, if the company has already accessed venture capital, listing allows venture capitalists to liquidate all or part of their holdings.
  • The business no longer runs on the entrepreneur's impulses and desires. There will also be a board of directors that is answerable to the general shareholders. The company's board must be carried out in a transparent manner and in the best interests of the shareholders.
  • In a sole proprietorship, all profits go to the owner, but in a publicly-traded company, the owner cannot keep all profits. Profits must get distributed to all other shareholders through dividends and bonus shares.
  • Earlier, there was no way for an entrepreneur to keep track of everyday improvements in his or her company's worth. There is a stock price in a publicly-traded company that indicates the company's worth, which fluctuates during the trading day. The entrepreneur must ensure that business decisions and company success are always in the best interests of shareholders.
  • India's listing and reporting conditions are among the strictest in the world. The publicly-traded company is expected to share details about its past results and plans regularly.

Disclaimer : ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, I-Sec is acting as a distributor to offer IPO distribution related services and distribution of IPOs are not Exchange traded products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Most Popular

  • 15 Sep 2021
  • ICICI Securities

5 Most Popular Reasons for Switching Bank

In the beginning, you would hear from them quite often. But of late, you're noticing more and more signs that it's no longer working. We are referring to your relationship with your bank. Click here to read how to recognize the red flags in your banking relationship and why it might be a good time to end the bond.

  • 15 Sep 2021
  • ICICI Securities

How Intraday Trading Works? Detailed Ideas

Intraday trading in India has been gaining momentum of late. It is no longer the option of only trade pundits.

  • 15 Sep 2021
  • ICICI Securities

What is Intraday trading? A Beginner's Guide

With the advancement of technology and increased knowledge about the stock market, trading is no more a domain dominated by stock pundits.

  • 05 Sep 2021
  • ICICI Securities

Is it Good To Invest in Cyclical Stocks?

Akin to how the pedals of a cycle go up and down as it moves forward, the share price of certain stocks goes up and down in accordance with the economic cycles a country goes through. 

  • 05 Sep 2021
  • ICICI Securities

A primer on Fixed Maturity Plans

If you happen to have some surplus funds which you don’t need for a specific period, but you don’t want to take the risk of investing this money in the stock market, you can very well put this money in a Fixed Maturity Plan or FMP. 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Equity Mutual Fund

You must have heard a lot about investing in mutual funds. But before jumping on this trend you need to assess a mutual fund scheme according to your goals, investment horizon, risk profile, liquidity needs and many other factors to find a suitable match. 

  • 05 Sep 2021
  • ICICI Securities

A Beginner’s Guide to Monetary Policy Tools

The Reserve Bank of India has the incredibly crucial responsibility to formulate the monetary policy. The main objective of monetary policy is to control inflation and provide a conducive environment for the country's economic growth. 

  • 05 Sep 2021
  • ICICI Securities

Buying Penny Stocks and its Risks

There is a specific category of stocks whose prices are very low and they seem to yield exponential returns. But do you know that investment in such stocks could be risky? 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Debt Mutual Fund?

Debt mutual funds primarily invest in fixed income securities, which include money market instruments like commercial papers, corporate bonds, treasury bills, government bonds and other instruments.

  • 05 Sep 2021
  • ICICI Securities

Tax Saving Using Section 80D

“Make your life safe and get insurance immediately”. This statement was never more relevant than the times when the pandemic threatens to wipe off the population. 

Open an Account

Sign Up for Free


Please use the mobile no registered with Aadhaar.

OTP sent to +91 1234567890

Didn’t received OTP? Resend



Get Research Backed Recommendations.

Download The app now

or Scan below QR Code To download app