INITIAL PUBLIC OFFERING

Subject : Economics

Context : The initial public offering (IPO) of India’s largest insurance company LIC is likely after October this year, a top official said.

Concept :

Government had introduced the legislative amendments required for disinvestment of a stake in Life Insurance Corporation of India (LIC) and IDBI Bank through the Finance Bill, 2021 presented along with the Budget.

Initial Public Offering :

IPO is the selling of securities to the public in the primary market.
Primary market deals with new securities being issued for the first time. It is also known as the new issues market.
It is different from secondary market where existing securities are bought and sold. It is also known as the stock market or stock exchange.
It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public.
Unlisted companies are companies that are not listed on the stock exchange.
It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.