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 :

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.

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.

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.