INITIAL PUBLIC OFFERING
- May 28, 2021
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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INITIAL PUBLIC OFFERING
Subject : Economics
Context : Recently, five companies filed their draft red herring prospectus (DRHP) for an initial public offering (IPO) with the Securities and Exchange Board of India (SEBI). In 2020-21, as many as 69 companies raised close to Rs 75,000 crore through public issues, including IPOs.
Concept :
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.