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Editorial Team
Quick AnswerAn Initial Public Offering (IPO) is the process where a private company offers its shares to the public for the first time to raise capital. In exchange for their investment, buyers receive equity ownership in the company. Once listed, these shares can be freely traded on stock exchanges.
Companies launch an IPO primarily to raise capital for expansion, debt repayment, or to allow early investors (like venture capitalists or founders) to cash out part of their holdings. By going public, the company gains access to deep pools of retail and institutional capital.
When you buy a regular stock, you are buying it from another investor on the secondary market (the exchange). When you participate in an IPO, you are buying the shares directly from the company (the primary market) before they list on the exchange.
In highly demanded IPOs, not everyone who applies gets shares. The allotment process for retail investors in India is essentially a lottery system when an issue is oversubscribed. If you receive an allotment, the shares are credited to your demat account; if not, your blocked funds are released.
To see which companies are currently raising capital, check our Active & Ongoing IPOs list.
An IPO for stocks is the first time a company issues equity shares to the public market to raise capital.
An IPO is the specific event of offering shares to the public for the first time. A stock is the actual share of ownership that you buy during or after the IPO.
For retail investors in an oversubscribed IPO, getting an allotment is purely lottery-based. However, picking a fundamentally strong IPO to apply for requires research and data analysis.
What is Live IPO GMP? Discover how tracking today's Grey Market Premium can help you predict listing gains and measure investor sentiment.
A complete step-by-step guide on how to apply for an IPO, check your allotment, and sell your shares on listing day.
Why do companies launch IPOs? A deep dive into the massive benefits and heavy burdens of taking a private company public.
