When a company issues its common stock or shares to the public for the first time, it is called an IPO or “public offer”. These are mostly issued by smaller, newer companies that want capital to grow their business, but It can also be issued by large privately-owned companies that wish to trade in the public market.
How to earn from IPO
The company fixes a price band for the IPO between which you can bid. Anyone investing less than Rs 2 lakh is considered a retail investor. In IPO you have to bid for at least one lot. Before investing, you should know whether you are betting on listing earnings or investing for a long time. Check at what valuation the company’s IPO is coming. Compare the valuations of other companies in the industry and sector the company operates in. This will reduce your risk of exposure. Also, take advice from experts regarding IPO. Investing in this way increases your chances of making a profit.