What is an IPO, how is investment made in it and how do investors get the benefits?

IPO: To raise money from the market, companies in India and abroad come up with an IPO (Initial Public Offer) in the stock market. This IPO is offered for investors and investors to invest money in it. It is a great weapon for companies to raise money from the market, but there is a big question lurking in it. That is, when companies bring IPOs to raise their own money, how do investors benefit? After all, why should an investor invest in a company's IPO? This question is valid and fair. Let's find out the answers to all these questions. Many private companies in the country are run by families or a few shareholders. When these companies need capital. So they are going public for the first time. This is called IPO i.e. Initial Public Offering. An IPO is a company's first public sale. A private company that brings an IPO to the stock exchange is actually allotting shares of the company to a large number of public, investors and others. This means that IPO buyers will get equity in the company in return. Why does a company issue an IPO? Apart from this, established companies issue IPO to expand their business. And some companies may issue IPO to meet their business expenses. How to launch an IPO: The entire process of issuing an IPO is under the supervision of SEBI, i.e. the Securities and Exchange Board of India. If any company is planning to launch an IPO, it has to follow all the rules of SEBI. The IPO is open only for a limited period of time, i.e. the IPO is open for 3 to 5 days. When investors take an IPO, they buy shares directly from the company. Investors can invest in the IPO within 10 days by visiting the company's website or through a registered broker. If an investor wants to invest in an IPO, first he needs to have a demat account. You can open a demat account from any brokerage firm. An account is linked to your demat account. All transactions of your IPO are done through this account. A retail investor can only invest up to Rs 2 lakh in an IPO at a time. Also Read: Which scheme of LIC is beneficial to invest money for long term? Know the details: After opening the ITO, the company makes the allotment. In this process the company offers shares in shares to all investors. After taking the IPO, it will be listed on the stock market. Shares can be bought or sold on the stock exchange but cannot be sold unless the shares are listed on the stock exchange. Shares allotted in an IPO are usually listed on stock exchanges such as BSE or NSE. Also Read: Retirement Funding: How to Prepare for Retirement Funding, Future-proof? What investors gain from an IPO is when the investor buys shares at the offer price. If the company opens in the stock market at a higher price, the investor will benefit. Apart from this, the public service allows investors to buy and sell shares at any time. SEBI changed the rules to give opportunities to retail investors in IPO shares so that retail investors get at least one share. And for the protection of retail investors, SEBI has complete information about the company. Investor can decide whether to invest in this company or not. When a company goes public, investors get an opportunity to buy shares at a lower price. Due to this there is a possibility of getting huge income in future. The biggest IPOs so far are those of companies like Reliance Power, TLF, ICICI Life Insurance. Story Input: Swati Kumari The post What is an IPO, How to invest in it and how investors benefit? Prabhat appeared first in Kabar.