An Initial Public Offering (IPO) is the process by which a private company becomes publicly traded by offering its shares to the public for the first time. It's a significant step for companies aiming to raise capital for expansion, pay off debts, or gain market recognition.
When a company decides to go public, it works with investment banks to determine the valuation and number of shares to be issued. IPOs offer early investment opportunities for individuals and institutions, often leading to substantial returns if the company performs well.
Benefits of IPO:
Access to capital for growth
Enhanced company profile
Liquidity for early investors
Risks of IPO:
Market volatility
Regulatory scrutiny
Loss of control for founders
Understanding IPOs helps investors make informed decisions and take part in wealth creation at an early stage.
