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    An initial public offering (IPO) is when a private company issues stock to the public for the first time. It allows the company to raise money from public investors, with the funds going directly to the company. While an IPO provides funding, it also carries risks as the future value of the stock can be hard to predict given the limited historical data on newly public companies. Only about 40% of shares are typically offered to the public, with the remaining shares kept by the company and government investors. Large IPOs are underwritten by investment banks to facilitate the share offering process between the issuing company, public investors, and underwriters.

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    Ipo

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    An initial public offering (IPO) is when a private company issues stock to the public for the first time. It allows the company to raise money from public investors, with the funds going directly to the company. While an IPO provides funding, it also carries risks as the future value of the stock can be hard to predict given the limited historical data on newly public companies. Only about 40% of shares are typically offered to the public, with the remaining shares kept by the company and government investors. Large IPOs are underwritten by investment banks to facilitate the share offering process between the issuing company, public investors, and underwriters.

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    8 views8 pages

    Prakash - Pgdma10@naarm - Ernet.i N

    Uploaded by

    prakash162157
    An initial public offering (IPO) is when a private company issues stock to the public for the first time. It allows the company to raise money from public investors, with the funds going directly to the company. While an IPO provides funding, it also carries risks as the future value of the stock can be hard to predict given the limited historical data on newly public companies. Only about 40% of shares are typically offered to the public, with the remaining shares kept by the company and government investors. Large IPOs are underwritten by investment banks to facilitate the share offering process between the issuing company, public investors, and underwriters.

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    of 8

    IPO

    …???
    prakash.pgdma10@naarm.ernet.i
    n
    Definition…
    • Initial public offering
    • Initial business offering
    • When a company issue its common stock
    or shares to the public first time.
    • Meant for monetary support from investors
    • Money paid directly go to the company

    prakash.pgdma10@naarm.ernet.i
    n
    Salient features
    • Risky investment- Hard to predict the
    future value
    • Generally little historical data of company
    are considered
    • The company is never required to repay
    the amount to the investors
    • Shareholders have right to distribute the
    future profits
    prakash.pgdma10@naarm.ernet.i
    n
    Contd…
    • Generally a company out its 40% of
    shares only
    • 5 to 10% with GOI
    • Remaining with company in order to have
    right to take decisions

    prakash.pgdma10@naarm.ernet.i
    n
    Some important terms
    • Issuer
    • Underwriter
    • Stag/investor
    » QIB(Qualified Institutional buyer)
    » Retail

    • Stag profit
    • Issue price

    prakash.pgdma10@naarm.ernet.i
    n
    Contd…

    Issuer Underwriter Stag

    prakash.pgdma10@naarm.ernet.i
    n
    List of largest IPOs
    • Agricultural Bank of China $22.1B in 2010
    • Industrial and Commercial Bank of China
    $21.9B in 2006
    • NTT Mobile Communications $18.4B in 1998
    • Visa Inc. $17.9B in 2008
    • AT&T Wireless $10.6B in 2000
    • Rosneft $10.4B in 2006
    • Santander Brasil $8.9B in 2009
    prakash.pgdma10@naarm.ernet.i
    n
    Thank u…!
    prakash.pgdma10@naarm.ernet.i
    n

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