Initial public offer

BY : HAJRA HAFEEZ
What Is Initial Public Offering ?
 An IPO (initial public offering) is referred to a flotation, which an issuer or a
company proposes to the public in the form of ordinary stock or shares. It is
defined as the first sale of stock by a private company to the public. They are
generally offered by new and medium-sized firms that are looking for funds to
grow and expand their business.
Factors to be considered before applying for an
IPO:
 The historical record of the firm providing the Initial Public Offerings
 Promoters, their reliability, and past records
 Products offered by the firm and their potential going forward
 Whether the firm has entered into a collaboration with the technological firm
 Project value and various techniques of sponsoring the plan
 Productivity estimates of the project
 Risk aspects engaged in the execution of the plan
The process involved in IPO:
UNDERWRITING:
 IPO is done through the process called underwriting. Underwriting is the process
of raising money through debt or equity.
 The first step towards doing an IPO is to appoint an investment banker. Although
theoretically a company can sell its shares on its own, on realistic terms, the
investment bank is the prime requisite. The underwriters are the middlemen
between the company and the public. There is a deal negotiated between the two.
Recent IPO’s in India:
Examples:

 Inox Wind: The shares were priced at about $5.2 apiece. It started trading at the
Indian bourses at around $6.45 a piece, 35% jump over offer-price a bumper
listing.
 Snowman Logistics: The stock had debuted at a premium of 68% to the IPO
price.
 VRL Logistics: With the strong demand from all categories of investors, and the
positive sentiment in the markets, the IPO was oversubscribed 74 times and the
shares listed at a premium of 40% to the offer price of Rs 205.
Advantages and Disadvantages of coming up
with an IPO:
conclusion
 One should always remember that although IPO is an opportunity to get into a
good company from the beginning but as IPOs happen once for each company,
they are presented in a way to get maximum attention. That is why avoid the hype
and get into an IPO for a good investment.
Thanking you
HAJRA HAFEEZ