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Is IPO safe for Companies?

A company has various options to raise funds. One of the methods is making an IPO by selling its shares on the stock exchange. Most of the trading in the Indian stock market takes place on its two stock exchanges (BSE) and (NSE).
For the company, it's an opportunity to raise money for development and expansion. IPOs promote new business creation, job opportunities, and investor interest. When a company starts its IPO, the employees are also allowed to buy a limited number of shares at the initial offer price.
Through an IPO public image of a company also goes up once it has been publicly listed and it gets more recognition from suppliers and customers too.
Advantages to going public with an IPO:
Raising capital: Companies will raise capital through an IPO and that fund can be used in corporate operations, growth opportunities, r&d, marketing, capital expenditures, and paying off debts.
Attracting and retaining employees: Companies can attract employees as the company can issue ESOPS in the future and can offer stock as a bonus. In the case of public limited companies, it is very easy to set up employee stock option plans.
Maintaining corporate identity: Companies going through an IPO are more recognizable and gain the attention of customers as it receives wide media coverage. Public companies are more transparent than private companies because they need to disclose information publicly including financial statement results.
 

FAQs:
1. What is a public issue?
Public issue of shares means the selling of shares for subscription by the public by issuing a prospectus.
2. What is the full form of IPO?
Initial public offer
3. What is an IPO?
When an unlisted company makes either a fresh issue of securities or offers its existing securities for sale for the first time to the public it is called an IPO.
4. Why will a company list its shares?
For the company, it's an opportunity to raise money for development and expansion. IPOs promote new business creation, job opportunities, and investor interest.
5.  What are some cons of listing shares through IPO?
·      Additional Regulatory Requirements and Disclosures.
·      long time involved in the IPO process.
6. Where can an issuer list its shares?
An issuer can list its shares on the stock exchange. Most of the trading in the Indian stock market takes place on its two stock exchanges.
7. What is the primary and secondary market?
In the primary market company issues various kinds of securities and investors can then buy those securities directly from the issuing company whereas, in the secondary market, securities that are issued are listed and traded through the stock exchange only.
8. What is an offer document?
An offer document is issued at the time of offering an invitation to buy or sell.
9. What is the role of SEBI in IPO?
 SEBI validate the IPO prospectus and make sure all the declaration made in this document are correct.