Upcoming IPOs

IPO Frequently Asked Questions (FAQs)

1. What is an IPO?

An Initial Public Offering (IPO) is the process through which a private company offers its shares to the public for the first time. This allows the company to raise capital from public investors.

2. Why do companies go public?

Companies go public to raise funds for expansion, pay off debt, or increase their visibility in the marketplace. Being listed on a stock exchange also enhances a company’s credibility.

3. What is the process of investing in an IPO?

Investors can participate in an IPO by applying for shares through their brokerage accounts. There is usually a specified period during which investors can submit their applications.

4. What are the risks associated with IPO investments?

IPOs can be volatile and carry risks. The company’s future performance is uncertain, and new public companies might not have a track record to evaluate. Investors should conduct thorough research before investing.

5. How are IPO prices determined?

IPO prices are typically set by the underwriters based on factors like company valuation, market conditions, and investor demand. This process often involves roadshows and discussions with potential investors.

6. Can I sell my shares immediately after an IPO?

In many cases, there are lock-up periods during which investors cannot sell their shares right after the IPO. This period usually lasts from 30 to 180 days, depending on the company and underwriters' agreements.