TradeWindowFx.com
Sunday, January 29, 2023
No Result
View All Result
  • Home
  • Banking
  • Business
  • Marketing
  • Insurance
  • News
TradeWindowFx.com
No Result
View All Result
Home Marketing
Understand the Role of IPO in Stock Market

Understand the Role of IPO in Stock Market

Saykat by Saykat
in Marketing
172 2
1
323
SHARES
2.5k
VIEWS
Share on FacebookShare on Twitter

Post the Covid-19 pandemic, IPO investment market has taken stock market investors by storm. Retail participation in the stock markets increased overall in the most recent fiscal year, FY22 (financial year 2021-2022), with 89.7 million demat accounts opened. That was a jump of 63% over the previous fiscal year. So, naturally many investors flocked to the stock markets. However, the IPO was one of the main destinations for new as well as old stock market investors. The year 2021 saw numerous new IPO listings on the stock exchanges. The IPO trend still continues in 2022, although it has seen a slowdown due to  various macroeconomic issues. 

Many IPOs delivered fruitful listing gains and short-term gains, and they rose up in popularity. However, in this article, let us look beyond those short-term gains, and comprehend the significance of the role of an IPO in the stock market. 

What is an IPO? 

If you are a newbie in the stock market, there is a high probability that you have heard the term IPO several times. However, if you wish to invest in one, you ought to know more. In simple words, an initial public offering, abbreviated as IPO,  is the means through which a private company lists itself on the stock exchange. So, an IPO is the first opportunity retail inventors get to invest in a company. When a company launches its IPO in India, it gets listed on the NSE and BSE, or at least on one exchange. In countries like the United States, IPOs list on the US stock exchanges like the New York Stock Exchange (NYSE) and the NASDAQ. 

So companies like Reliance Industries, Asian Paints, and ICICI Bank all listed on the exchanges by coming out with their IPOs. But why would a company want to list itself on the stock exchange and sell its shares to the public? 

Role of an IPO 

  1. Raising Capital 

The main reason a company comes out with an IPO and lists itself on the stock exchange is so that it can raise capital. Through an IPO launch, the company raises capital, in the form of funds by letting the public make an IPO investment . A company may require funds for various reasons with growth being the primary one.A company begins small and may initially rely on debt and PE (private equity) funds to fund expansion projects. However, once it reaches a mature growth phase, an IPO makes plenty of sense to raise funds and continue its growth trajectory. The money it raises through the IPO is used to scale up the existing business, make new acquisitions, and meet operating expenses. 

  1. Other Corporate Purposes 

Besides capital expansion, the business could also use the money to pay off existing debt and offer exit routes to existing investors like PE funds and venture capitalists. These PE funds and venture capitalists, look out for new startups that could pose as interesting investing opportunities. At the same time, when the company is listed on the stock exchanges, that enhances its public image, because a publicly traded company needs to meet a bar of transparency. The company is to announce how it plans on using the funds before launching its IPO. 

  1. Providing New Investment Opportunities 

 The IPO plays a great role in terms of helping a company raise money. But what is it for the investors in the stock market making the IPO investment? The answer is simple—an IPO gives retail investors new opportunities to grow their wealth and compound it over time. Just  imagine how much money investors might have made had they invested in and held on to IPOs of companies like Reliance Industries, Infosys, or Tesla. You could take a look at the maximum price chart of these companies if you do not have perspective. Now imagine  what would have happened if all these companies never went public. Investors would never be able to take advantage of the wealth these companies generated. 

However, remember that not every IPO investment  will list and become a multibagger like Reliance or Infosys. In fact, several companies also take advantage of the masses and launch their IPOs at extravagant valuations. So, invest in an IPO only after you analyse the company diligently. 

  1. Growth of Economy 

The country’s stock market expands as more companies list on the open market And as the company continues to flourish, it helps grow the wealth of retail investors. At the same time, the company may catch the eye of foreign investors and bring in foreign capital to the country. The foreign inflow will help the company scale further and contribute to the GDP of the country. So, if you look at it from a macroeconomic perspective, an IPO helps with GDP growth. 

Conclusion

So, an IPO investment may play an important role in helping the company grow, the  investor’s wealth grow, and even the country’s GDP grow. However, as a retail investor, always stay diligent and invest in only those IPOs where you see potential and value. You can subscribe to any IPO, once the subscription window opens, using your trading account. 

Related Posts

Foolproof techniques for improving your marketing
Marketing

Foolproof techniques for improving your marketing

January 27, 2023
Best Tips for Your Affiliate Marketing Campaigns
Marketing

Best Tips for Your Affiliate Marketing Campaigns

January 11, 2023
A number of benefits of Digital Marketing
Marketing

A number of benefits of Digital Marketing

December 27, 2022
Next Post
Diagnosis And Treatment Of Pneumonia 

Diagnosis And Treatment Of Pneumonia 

Comments 1

  1. sindhu reddy says:
    1 month ago

    The European Union has required mandatory conformance labelling for items sold inside the European Economic Area since 1985, and this is known as the Conformite Europeenne Mark.CE Mark Certification in India A producer certifies that their goods are compliant with the Approach Directives by using the CE marking.These guidelines apply to both produced goods and goods that are sold within the.Because of this, the CE designation is identifiable everywhere, including in the EEA.The CE marking also signifies that the producer can, upon request, provide technical evidence that supports the use of the mark in order to market the product in the EU.Given that the manufacturer or importer has certified to the product’s compliance with the relevant EU rules, a product bearing the CE mark may be marketed everywhere in the European Economic Area.A non-compliant product cannot have a CE mark applied to it, and it cannot be sold.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • A Deep Dive Into Option Trading January 29, 2023
  • Buying Guide for Water Filters January 29, 2023
  • What Employers and Employees Need To Know About Workman’s Comp in New York January 29, 2023
  • Saving energy With These Seven Tips January 27, 2023
  • What to Consider When Setting Up Offices for Your New Business January 27, 2023

Categories

  • Accessories (4)
  • All (283)
  • Animal (1)
  • apksavers (9)
  • Apps (4)
  • Banking (9)
  • Beauty (1)
  • Business (207)
  • Car (5)
  • CBD (4)
  • Digital marketing (2)
  • eCommerce (1)
  • Education (29)
  • Entertainment (19)
  • Fashion (37)
  • Finance (1)
  • Food (4)
  • Gadget (4)
  • Games (5)
  • Health (61)
  • Home (9)
  • Home Improvement (1)
  • Insurance (10)
  • Law (9)
  • Lifestyle (46)
  • Loan (2)
  • Marketing (31)
  • News (239)
  • Online Dating (1)
  • Pet (3)
  • Product (1)
  • Real Estate (1)
  • Science & Technology (1)
  • Shopping (1)
  • Social Media (6)
  • Sports (27)
  • Tech (20)
  • Technology (112)
  • Tips and guide (19)
  • Trading (1)
  • Travel (18)
  • Wikipedia (1)

TradeWindowFx.com Provide by Forex Business Marketing Banking insurance News Here. 2021 top breaking Forex news here..

Contact: support[at]gposting.com

Follow us on social media

Categories

  • Accessories
  • All
  • Animal
  • apksavers
  • Apps
  • Banking
  • Beauty
  • Business
  • Car
  • CBD
  • Digital marketing
  • eCommerce
  • Education
  • Entertainment
  • Fashion
  • Finance
  • Food
  • Gadget
  • Games
  • Health
  • Home
  • Home Improvement
  • Insurance
  • Law
  • Lifestyle
  • Loan
  • Marketing
  • News
  • Online Dating
  • Pet
  • Product
  • Real Estate
  • Science & Technology
  • Shopping
  • Social Media
  • Sports
  • Tech
  • Technology
  • Tips and guide
  • Trading
  • Travel
  • Wikipedia

Recent News

  • A Deep Dive Into Option Trading
  • Buying Guide for Water Filters
  • What Employers and Employees Need To Know About Workman’s Comp in New York
  • Home
  • Privacy Policy
  • Contact us

© Copyright 2021, All Rights Reserved

No Result
View All Result
  • Contact us
  • Home
  • Privacy Policy

© Copyright 2021, All Rights Reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Cleantalk Pixel