What is Initial Public Offering or IPO? - Explained

What is Initial Public Offering or IPO? - Explained


Not every Private Limited Liability Company can go public and not every Private Limited Liability Companies are granted to go public. When a private limited liability company goes public or getting listed on a stock exchange, there are certain rules or set of methods needs to be followed as guided by the stock exchange where the company is getting listed.

After doing the valuation and after validating whether the company could go public, stock exchange mark a price per share of the company which is going to offer to the public after doing the valuation for the company. 


What is an Initial Public Offering or IPO?

When a company is going public, the very first share offering of the company at the stock exchange given price per share is known as Initial Public Offering also known as IPO.

In the initial public offering, investors and traders can make their bids to the shares of the company which is offering shares to the public. From the moment where the company starts the Initial Public Offering or IPO, company is known as it's gone public and the company classification is getting changed to Public Limited Liability Company.

Initial Public Offering is an event which is part of a company going public. Initial Public Offering is also a important event of a company which is going public.


After IPO?

Initial Public Offering can be run up to few trading days of a particular exchange where the company is getting listed. After the time when the initial public offering is ended, the stock exchange holds the trading for the particular shares of the company to convert the shares to normal trading and log the number of shares what a investor or a trader has purchased.

Initial Public Offering or IPO determine the amount of cash collected by selling shares of the company to the general public by the company. The higher amount of sales of share prices of the company at the Initial Public Offering or in the IPO tells the general public how popular the company is and how much of investors are interested of the company.