What is Initial Public Offering? How people become rich from it?

What is IPO(Initial Public Offering)? How people become rich from it?

Friends, the stock market is booming right now. One new IPO (Initial Public Offering) after another is coming. Nowadays everyone is thinking of investing money in it. Today we will know complete information about IPO.

What is IPO (Initial Public Offering)?

IPO means Initial Public Offering. If there is a new company, it has to invest in doing business. If there is an old company, it also has to invest to grow its business. Often a company does not have the money to invest. The company IPO launch at the time when they have no money but have to continue their business. If a company wants to sell its profits to the public, it launches IPO.

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What is face value?

The company sells its shares. And the share price is determined by the company. The people who buy, the people get shares. Each share has a face value. Ex. If the face value of a share is 10 rupees, then we are said to have become a partner of 10 rupees in that company. And the excess money is called premium. As you know, if there are too many people to buy a single item, its price is bound to increase. The increase is called premium. And that goes into the company’s balance sheet.

The number of people who the shares of a company is called the shareholders of that company. Shareholder means the owner of the company. The more shares you have, the more ownership in the company. When a company’s stock enters the market, it is listed on the NSE(National Stock Exchange of India Ltd) and BSE(Bombay Stock Exchange). 

What is Stock Exchange?

The stock exchange is a kind of market. Where you can buy and sell stock. The stock exchange brings together both buyers and sellers. If there are more buyers than sellers of shares of a company then the price of that company will go up. If there are more sellers than buyers of shares of a company then the price of that company will go down.

SEBI(Securities and Exchange Board of India) has to regulate all the stock exchanges. SEBI is getting information about all the new IPOs. Generally, shares of any company are found in IPO at the lowest price. If the shares are found in IPO, the chances of making a profit are higher. You have to go through the official website of SEBI to see it. But before you invest, you have to do your own research.

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How to apply for IPO(Initial Public Offering)?

There is a new technology to apply in IPO(Initial Public Offering). Whose name is ASBA (Applications Supported by Blocked Amount). If you are applying for IPO, So it is not necessary to meet all the people. The amount of IPO will be blocked in the bank account from which you have applied for IPO. And if you get shares of the company, that amount will go into the company’s account. If you do not receive the company’s shares, the amount will be returned to your account.

It has become very easy to apply for IPO(Initial Public Offering). You can use any Netbanking to apply IPO Application. Apart from this, you can also apply to any stock broker or bank in a physical way. But before applying, it is important to consult a financial advisor.

What is benefits of IPO(Initial Public Offering)?

An IPO in the name of Route Mobile came to our country only a short time ago. Prices ranged from Rs.345 to Rs.350. If you have subscribed to it, its one share price today is Rs.1181. In which you see more than 300% benefit. The company grew by 338% in just 3 months. Like that, when Dmart IPO came out in 2017, its price was between Rs. 295/- to Rs.299/-. Its value today is more than Rs.2500. An increase of 842% in 3years.

 

 

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