Jagran Business: Know What is IPO and how to Buy it.

30 Jun, 2022

When it comes to the stock market, you must have also heard about IPO (Initial Public Offering). What is it and why does a company bring it up? To know about IPO in detail, you must watch this video of Laxmi Bhai.

What is IPO?

An initial public offering, also known as a stock launch, is a public offering in which shares of a company are sold to institutional and, in most cases, retail investors. One or more investment banks typically underwrite an IPO, as well as arrange for the shares to be listed on one or more stock exchanges.

In simple words, When an unlisted company (one that is not listed on a stock exchange) decides to raise funds for the first time by selling securities or shares to the public, it announces an initial public offering (IPO). In other words, an IPO is the primary market sale of securities to the general public.


How to Buy IPO?

Purchasing IPO stock may be appealing. A block of common stock purchased during an initial public offering has the potential to generate massive capital gains decades later. Given a few decades, even a highly successful company's annual dividend income can exceed the original investment amount.

You can apply for an IPO using either your trading or bank account. Some banks group trading, demat, and bank accounts together. Once your trading-cum-demat account has been activated, you should be aware of the Application Supported by Blocked Amount (ASBA) facility, which is required for IPO applications.

 

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