Basic About IPO
IPO or Initial Public Offering is the very first sale of stock issued by a company to the public.
Initial Public Offering (IPO) is the process by which a company raises money by selling the shares of the company to the general public for the first time. It could be a new or an old company.
Growth of a company requires capital and with the help of an IPO, a company can raise additional capital. The company which offers its shares, known as an ‘issuer’, does so with the help of investment banks.
Why do Companies go public?
1) Raising Capital:
If the business owner wishes to raise capital then they can go for the public. It can raise a very good amount of capital or money to grow and expand the company. Before going public the company must disclose full financial information about itself.
By going public, a company provides liquidity for its shareholders. When a company grows, the shareholders can also build wealth.
Is it safe to invest in IPOs?
Investing in Initial Public Offerings (IPOs) is a high-risk, high-return game. If you had subscribed to the mega IPO of Reliance Power, which raised ₹11,700 crore in 2008, you would be staring at a loss of 82 percent now. On the other hand, if you had subscribed to offers made by Page Industries or YES Bank, you would have gained over 2,000 percent.
The IPO market in India has matured over the last five years. It is much safer than it was in earlier times
Some of the largest IPO’s to date are:
Coal India Limited –The company had raised Rs. 15,200 crore through IPO
Reliance Power Limited – Rs.11, 700 crores through the IPO
General Insurance Corporation (GIC) IPO – INR11,256.83 crore
Oil and Natural Gas Corporation Limited (ONGC) – Rs 10,534 crore
New India Assurance – INR9,585.82 crore
DLF – INR9,187.5 crores
HDFC Standard Life Insurance – INR8,695.01 crore
The company above 400 crores which gave listing gain above 40%
Avenue Supermart –114.3%
CDSL – 75.75
Dixon Tech – 63.81
HDFC AMC – 60.96
Quess Crop – 58.68
AU small Fin – 51.17
Dr Lal Path Lab – 49.85
Amber Enter – 44.03
VRL Logistic – 43.07
MAS Fin – 42.65