What is IPO?

An initial public offering (IPO) is the process by which a privately held company raises capital by selling its stock to the public for the first time. IPOs are a way for companies to raise money to finance their operations, pay off debt, or fund new projects. When a company goes public through an IPO, it becomes a publicly traded company, which means its stock can be bought and sold by investors on a public stock exchange.

The process of going public through an IPO involves the company issuing new shares of stock to the public, which are then sold through an underwriting firm. The underwriting firm acts as an intermediary between the company and the investors, and it is responsible for pricing the shares, promoting the offering, and managing the distribution of the shares to investors.

IPOs can be a risky investment, as the value of the stock may fluctuate significantly in the short term. However, they can also offer investors the opportunity to get in on the ground floor of a company that has the potential for significant growth.