Don’t miss the latest and upcoming IPOs. Invest in new public issues, evaluate companies, and invest early in the next market success stories.
If you follow finance news or stock market updates, you may have heard the term IPO quite often. Many companies announce their IPO, and people start applying with the hope of getting good returns. But if you are new to the market, you might wonder — What exactly is an IPO, why do companies launch it, and how can you invest in it?
IPO stands for Initial Public Offering. It is the process in which a private company offers its shares to the general public for the very first time. Before IPO, the shares of the company are owned mostly by:
Founders or Promoters
Early-stage Investors
Private Equity Firms
Venture Capitalists
But once the IPO is launched, any person with a demat account can invest in the company and become a shareholder.
So, in short:
➡️ Before IPO – Company is private.
➡️ After IPO – Company becomes public and is listed on the stock exchange.
Companies come up with an IPO for several reasons. Here are some common ones:
A company needs money to expand its business, open new branches, launch new products, upgrade facilities, or enter new markets. IPO helps raise this capital from public investors.
Some companies have loans or financial burdens. Raising funds from IPO helps them reduce debt and improve their financial stability.
Once a company is listed on the stock exchange, it gains market trust, publicity, and recognition.
People who invested early in the private company can sell some of their shares during IPO and book profits.
Here is a basic explanation of the IPO process:
Company decides to go public and hires investment bankers.
A Draft Red Herring Prospectus (DRHP) is prepared which contains company details, financials, risks, etc.
The price band is decided. For example, ₹100–₹110 per share.
IPO opens for the public for 3 days.
Investors apply through their demat & UPI.
After IPO closes, shares are allotted based on demand.
Then the shares get listed on NSE and BSE.
Trading begins from the listing day.
If more people apply than the number of shares available, the IPO is said to be oversubscribed.
IPO investments are divided into 3 main categories:
| Category | Who Can Invest | Example |
|---|---|---|
| Retail Investors | Normal individuals like us | Small investors applying up to ₹2 lakh |
| HNI / NII | Higher net-worth investors | Investors applying more than ₹2 lakh |
| QIB (Institutional Investors) | Financial institutions | Banks, Mutual Funds, Insurance Companies |
Each category has a reserved quota.
Today, applying for an IPO is very simple. You need:
Demat Account
Trading Account
UPI ID (Google Pay / PhonePe / Paytm etc.)
Steps:
Open your broker app (Zerodha, Groww, Upstox, Angel One, etc.)
Go to the IPO section.
Select the IPO you want to apply.
Enter the lot size.
Approve the UPI request in your UPI app.
That’s it! Your IPO application is submitted.
Some IPOs list at a price higher than the issue price, giving investors quick profit.
If the company grows well over time, the investor can benefit long-term.
Before IPO, companies are required to share detailed financial and business information in the prospectus. This helps investors analyze the company better.
Even though IPOs look attractive, they also involve risks:
The company may not perform well after listing.
The share price can fall below the issue price.
Market conditions can affect stock performance.
Hype around popular IPOs can mislead investors.
That’s why investing without research can be risky.
To make a smarter decision, always check:
| Factor to Check | Why It’s Important |
|---|---|
| Company Financials | To understand profit and stability |
| Business Model | To know how the company earns money |
| Growth Plans | Shows future potential |
| Promoter Background | Helps judge management trustworthiness |
| Industry Competition | To see how strong the company is compared to others |
| Valuation | To know if the IPO is overpriced |
A little research can save you from wrong investment decisions.
No. Not every IPO gives profit. Some IPOs list at a discount and investors face losses.
So don’t follow crowd or hype blindly.
Instead:
Read IPO reviews from experts
Compare valuation with other companies in the same industry
Understand the company’s future plans
If you think the company is strong, stable, and has a good long-term growth story, then investing may be a smart choice.
An IPO is a great way for individuals to participate in a company’s growth journey from the early stage. It gives companies the opportunity to raise funds and gives investors a chance to invest in promising businesses.
However, IPO investment should be done with awareness and research, not only for quick profits. If done wisely, IPOs can help build long-term wealth and provide meaningful returns.
Start slow, learn step by step, and invest wisely.
An IPO gives the general public a chance to become part of a company’s growth journey. Many companies that are big today, like Reliance, TCS, Infosys, Zomato, and many others, all started with IPOs. As an investor, you should understand the company’s value before applying.
Investing in IPOs can be rewarding, but it is always wise to study, compare, and make decisions carefully. With the right knowledge and patience, IPOs can become a good investment opportunity for the future.
If you follow stock market news, you must have heard the term IPO many times. Many companies launch their IPO to raise funds and become listed on the stock market. But what exactly is an IPO, and why do companies and investors look forward to it? Let’s understand in simple words.
IPO stands for Initial Public Offering. It is the process where a private company becomes a public company by offering its shares to the general public for the first time. Before the IPO, the company is usually owned by founders, promoters, and a few investors. After the IPO, anyone can buy shares of the company through the stock market.
