IPO - Wellworth Share & Stock Broking Ltd. |
Overview |
Background |
Initial Public Offering (IPO) is when an unlisted company makes either a fresh
issue of securities or an offer for sale of its existing securities or both for
the first time to the public. |
Some of the reasons why companies go for an IPO is as follows :
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Additional Capital resources for funding of projects/expansion plans. Dilution
of existing promoters share holding. Value Hedging PMS Listing enhances
corporate image thus providing visibility.
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Book Building and Fixed Price Issue are the two types of Initial Public
Offerings (IPOs) through which a corporate can raise money in the capital
market.
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In a book building public issue the bids are received at different price levels
and the demand for the issue is built up over a period of time. Depending upon
the bids received at different price levels the issue price is ascertained. In
a fixed price issue the issue price is pre ascertained by the issuer.
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