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What is an IPO?

IPO stands for Initial Public Offer. An IPO is open selling of securities of a company by the company itself for subscription by the public at large. When a company wants to raise money, one of the ways it can do so is by selling its equity shares to the public. When the company comes out with the issue for the first time, an IPO.
Once an IPO is offered to public at large, it is subsequently subscribed and after the end of subscription period, it gets listed on the stock exchanges. After the IPO, the shares get listed on the stock exchange and shareholders can trade their shareholdings on the exchanges.

Why invest in IPO?

Investing in IPO makes a lot of sense as owning a share of a company is like owning a part of the company where you would be considered as a share holder and would be involved in company decisions as a shareholder. If you get to own a part of a company at a price which is the best possible price than buying in secondary market and be one of the first share holders of the company; why not utilize the opportunity. Besides this, you don't even need to follow up daily for a favorable price at which you would like to buy the share.
If you have the resources, can gather information, analyze the risk and rewards involved in an investment opportunity and take an informed decision, it is best advised to invest in an IPO.

What is a FPO?

FPO stands for Follow on Public Offer. When a company raises capital either through fresh issue of securities to the public or an offer for sale to the public, through an offer document after an IPO has already been made, shares of the company are held by public and already listed on the stock exchange; it is called a FPO.

 

Why do companies come out with IPO?

Most companies are started privately by their promoters. However,the promoters' capital and the borrowings from banks and financial institutions may not be sufficient for setting up or running the business over a long term.
So companies invite the public to contribute to the company's equity capital by issuing shares to individual investors. The best way to do so is to invite share capital from the public through an IPO. An IPO is an open offer made to the public to subscribe to the share capital of the company. Once the shares so offered are subscribed, he company allots shares to the applicants as per the rules and regulations laid down by SEBI.

Who is a Registrar?

A Registrar is a company / organization that has been appointed by a company which has issued shares for public subscription and is assigned the task of accepting and processing share tholder's applications, carrying out communications with share holder's and helps to resolve their grievances. In addition, the registrar also receives and processes requests for dematerialization and re materialization. The Registrar also maintains an updated and accurate record of the shareholder's of the designated company.

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