10.1What is an IPO?
1What is it?
An Initial Public Offering (IPO) is the first time a private company offers its shares to the public and lists on a stock exchange.
2Why does it exist?
It moves the company from private to public ownership, raising money and giving early investors a way to sell.
3Real-life example
A family business that was owned by 5 people now invites lakhs of people to own a piece.
4Quick revision
- First public sale of shares.
- Company lists on NSE/BSE.
- Primary market.
5Knowledge check
Q1. Is an IPO primary or secondary market?Show answer
Primary market.
Q2. After the IPO, where do shares trade?Show answer
On NSE/BSE (secondary market).
Q3. Does every IPO make money for investors?Show answer
No.
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