ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Companies must meet requirements by exchanges and the Securities and Exchange Commission (SEC) to hold an IPO.

Detailed explanation-2: -A follow-on public offer (FPO), also known as a secondary offering, is the additional issuance of a company’s shares after its initial public offering (IPO). Companies usually announce FPOs to raise equity or reduce debt.

Detailed explanation-3: -An Initial Public Offer (IPO) is the selling of securities to the public in the primary market. It is the largest source of funds with long or indefinite maturity for the company. An IPO is an important step in the growth of a business. It provides a company access to funds through the public capital market.

Detailed explanation-4: -IPO (Initial Public Offering) and FPO (Follow on Public Offer) are the major concepts that companies used for their own purpose to raise capital from the equity market. Every beginner who is looking to invest in IPO must have a basic knowledge about these two fundamentals that are widely used in the stock market.

Detailed explanation-5: -Investment banks set the IPO price. The company decides how many of its shares it wants to sell to the public and then the nominated investment bank does a valuation of the business. Once that’s done, an initial share price is released, and the public can start trading shares when the listing happens.