IPO

An Initial Public Offering (IPO) is the process by which a privately held company first offers its shares to the general public on a regulated stock exchange — transitioning from private to public ownership and providing the company with access to equity capital from a broad investor base. In India, IPOs are governed by SEBI's ICDR (Issue of Capital and Disclosure Requirements) Regulations — requiring filing of a Draft Red Herring Prospectus (DRHP) with SEBI, completion of a book-building or fixed-price process, mandatory allotment to QIBs (minimum 75%), NIIs (minimum 15%), and retail investors (minimum 10%), and listing on NSE or BSE within six days of allotment. For companies, IPOs provide permanent equity capital, enhanced brand visibility, a currency for acquisitions (listed shares), employee retention through ESOPs, and promoter liquidity. For investors, IPOs offer early-stage access to companies not yet publicly available, often at valuations more attractive than post-listing secondary market prices. The Indian IPO market has been extraordinarily active — with record fundraising years between 2020 and 2024 and landmark IPOs including LIC (India's largest IPO at ₹21,000 crore), Hyundai India, Paytm, Zomato, and Nykaa. Retail investors in India apply for IPOs through the ASBA (Application Supported by Blocked Amount) mechanism via their bank or broker — with funds blocked (not debited) until allotment, ensuring no opportunity cost if not allotted.