An Initial Public Offering (IPO) is the process through which a private company offers its shares to the public for the first time. It’s a major step in a company’s growth journey — transforming it from a privately held business into a publicly traded entity on a stock exchange like NSE or BSE.
When a company goes public, it allows individual and institutional investors to buy ownership in the company by purchasing its shares. In return, the company gains access to a large pool of capital that can be used for expansion, debt repayment, or new projects.
Why Do Companies Go for an IPO?
There are several reasons why companies choose to go public:
Raising Capital:
The most common reason is to raise funds for growth. Companies can use the money for business expansion, product development, or paying off existing debt.Increasing Visibility and Credibility:
A listed company enjoys more trust and visibility in the market. This credibility helps attract new investors, partners, and customers.Providing an Exit for Early Investors:
Founders, venture capitalists, and early-stage investors can sell some of their holdings to realize profits once the company lists on the exchange.Employee Incentives:
Publicly traded shares can be offered to employees as stock options, encouraging them to contribute to the company’s success.
The Process of Launching an IPO
The journey from a private company to a public one involves several stages:
Board Approval:
The company’s management and board of directors decide to go public and approve the IPO plan.Hiring Investment Bankers:
Investment banks (also known as underwriters) are appointed to guide the company through the process. They help determine the offering price, number of shares, and timing.Due Diligence and Regulatory Filings:
The company prepares detailed financial and business information to submit to market regulators like SEBI. This ensures transparency and protects investor interests.Marketing and Roadshows:
Before the IPO opens, the company and its bankers hold presentations for potential investors to generate interest and explain the business model.Price Band and Subscription:
The company announces a price range (called the price band) and invites investors to bid within that range. This period is known as the IPO subscription window.Allotment and Listing:
After the subscription closes, shares are allotted to investors. The company’s stock then gets listed on the exchange, and trading begins.
How Investors Can Participate
Retail investors can apply for an IPO through their broker’s platform or their bank’s ASBA (Application Supported by Blocked Amount) service.
In this process, the application amount remains blocked in the investor’s bank account until the shares are allotted.
If the IPO is oversubscribed — meaning more people apply than the number of available shares — then allotment happens based on a lottery system.
Once allotted, investors can either hold the shares for the long term or sell them after listing, depending on their investment goals.
Why IPOs Are Important for the Market
IPOs are not just about raising money — they play a key role in keeping the stock market dynamic and competitive.
Every new listing adds more variety for investors, introduces new industries to the market, and strengthens overall investor participation.
For traders, IPOs offer short-term opportunities, especially if the stock lists at a premium. For long-term investors, IPOs can be a chance to invest early in promising businesses before they grow larger.
Making IPO Data Accessible to Everyone
Understanding IPOs is one thing — tracking them efficiently is another.
Our platform, BhavTable.xyz, helps users access essential market data such as daily bhav copies, stock movements, and updates on listed companies.
By simplifying complex financial data, we make it easier for investors to stay informed and make smarter decisions — whether it’s analyzing a new IPO or tracking a stock’s daily performance.