WHAT IS IPO? WHY DO COMPANIES GO FOR IPO?

An Initial Public Offering (IPO) is a crucial process through which a private company transitions into a publicly traded entity by offering its shares to the public for the first time. Companies opt for an IPO for various reasons, primarily to raise capital for expansion, pay off debt, or invest in new projects. Going public can significantly enhance a company’s visibility and credibility, providing a valuable marketing edge. Additionally, an IPO allows existing shareholders, such as venture capitalists and founders, to liquidate their investments and realize profits. However, this transition also brings added scrutiny and regulatory responsibilities, as public companies are required to disclose financial information regularly. Overall, an IPO serves as a strategic tool for growth and sustainability in a competitive market.