IPO Explained — How Companies Go Public

IPO (Initial Public Offering) is when a private company sells its shares to the public for the first time. Before an IPO, only founders and private investors own the company. After an IPO, anyone can buy shares. Why do companies do IPOs? To raise capital for expansion, pay off debt, or let early investors exit. How to apply: Through your broker or bank using ASBA (Application Supported by Blocked Amount). Money is blocked but not debited until allotment. IPO allotment is by lottery if oversubscribed. Listing day price can be higher or lower than issue price. Grey market premium (GMP) gives a rough idea of expected listing price but is not reliable.