What is IPO | Defination of IPO
When any new company lists its share in the stock market for the very first time and issue that share in public, it is known as IPO. When any Pvt ltd. co. company issue its Shares to the public it converts into public ltd co.
The full form of IPO is INITIAL PUBLIC OFFERING
WHY COMPANY ISSUE IPO?
When a company is needy for the money or want to expand their business so, it requires a huge amount of money. In that case, the company has two options. Options are given below:
- Loan from bank
- Issue share
If a company takes a loan from the bank so, it has to pay interest in return as well and it would not be profitable for any of the companies, therefore, the issue of the Share is the best option. so that company issue his share in public. After the issue of the share, the company gets a huge amount of money without paying a single amount of money and the public could earn some amount of money also.
BENEFITS OF PURCHASING IPO?
- There is more chances to get shares in a less amount of money.
- Company can grow up fast.
- You have to purchase shares in a lot.
- It is not necessary that whatever shares you applied to purchase all you can get. Shares could be more or less.