Initial Public Offering (IPO)

Initial Public Offering (IPO)

Subject – Economy

Context – The Centre is set to list India’s largest insurance firm, state-owned Life Insurance Corporation of India, on the stock exchanges to help meet disinvestment targets for the year

Concept –

• 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.
• It is generally used by new and medium-sized firms that are looking for funds to grow and expand their business.