Initial Public Offering (IPO)

Initial Public Offering or IPO is selling of stocks or entities of a private company to public. IPOs are often issued by companies to get capital required for further expansion. An IPO allows a company to tap a wide pool of investors to provide itself with capital for future growth, repayment of debt or working capital. Once a company is listed on Stock Exchange, it can issue further stocks via FPO i.e. Followup Public Offering. There are several benefits when a private company goes public:

-Cheaper access to capital
-Exposure, prestige and public image
-Attracting and retaining better management and employees through liquid equity participation