IPO Basics4 min read
What is an IPO?
An Initial Public Offering is the moment a private company first sells shares to the public. Here is how it works.
An Initial Public Offering, or IPO, is the first time a private company sells its shares to the general public, in the process becoming a listed company you can trade.
Why go public?
To raise capital for growth, to let early investors and founders cash out part of their stake, and to gain the visibility and credibility that come with being listed.
The price band
Before the IPO, the company sets a price band. Investors apply within that band, and the final issue price is fixed based on demand. On listing day, the stock starts trading and its price is set by the open market.
Frequently asked
- Can I sell IPO shares on day one?
- Yes, once the stock lists you can sell it in the secondary market like any other share.