HOW IPO TRADING WORKS?

An Initial Public Offering (IPO) is a significant financial event where a private company offers its shares to the public for the first time. This process allows the company to raise capital by selling a portion of its ownership to investors, which can be individuals or institutional entities. The main goal of an IPO is to generate funds for expansion, pay off debts, or invest in new projects. By going public, the company gains access to a broader pool of investment and increases its visibility in the market. However, this transition also brings increased scrutiny from regulators and shareholders, requiring the company to adhere to stricter reporting and governance standards. The IPO process typically involves various stages, including underwriting by investment banks, marketing to potential investors, and setting a price for the shares based on demand. Overall, an IPO can be a transformative step for a business, marking its entry into the public capital markets.