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Launch IPO Why Do Companies Go Public

  1. Stock Markets Basic
    1. Invest:3 benefits of investing for your future
    2. Types of Investment Diversification asset classes
    3. What is the share market? What Does It Do and How Does It Work with examples
    4. SEBI What is Securities and Exchange Board of India
    5. Stock Broker Financial Intermediaries or Market Intermediaries role in share market
    6. Depository and types of Depository Participants in India
    7. ICCL, NSE Clearing Limited and Bank’s role as Financial intermediary
    8. Angel Investors What are their roles with examples
    9. Venture Capitalist Who Are They and What Do They Do
    10. CAPEX Understanding Capital Expenditure with examples
    11. Private Equity Explained Understanding PE With Examples
    12. Initial Public Offering (IPO): What It Is and How It Works
    13. Launch IPO Why Do Companies Go Public
    14. IPO process how Initial Public Offering works in India
    15. What is IPO Key Terms Related to Initial Public Offering
    16. What is the share market?
    17. Share price understanding how does prices increase or decrease with examples
    18. Share trading: How Does It Work? with examples
    19. Types of traders in share market
    20. Market Index How Indexing Works, Types, and Examples in share market
    21. Share market indices importance and key terms
    22. Index construction methodology
    23. Share market terminology
    24. Share market terminology for beginners
    25. How to Trade Shares for Beginners
    26. Clearing and settlement process in the Indian Share market
    27. Stock selling learn What happens when you sell a stock
    28. Corporate actions in share market and impact on prices
    29. Bonus Issue of Shares Explained and How They Work
    30. Stock Split and Buyback of Shares What you need to know
    31. Monetary Policy by RBI Repo Rate, reverse repo rate, Cash reserve
    32. Inflation and IIP explained with examples
    33. Purchasing Managers Index, Budget, Corporate Earnings Announcement and Non-Financial events
    34. Stock market basics for beginners
    35. Offer for Sale and Follow-on Public Offer explained with examples
    36. Rights Issue and its relevance to shareholders explained with examples
It is necessary to comprehend the factors that lead to an Initial Public Offering (IPO), as the IPO market, also known as the Primary Market, often draws many novice share market investors.  This chapter will examine the IPO process, and the various elements involved in a company’s IPO. Why Do Companies Go Public? We ended the prior chapter with a few questions left unanswered: why precisely did the company take the step of registering an IPO, and in a broader sense, why do businesses opt to go public? When a business plans an initial public offering, raising funds to meet CAPEX needs is one of the primary motivations. Another aim could be to lower expensive debt or give an early-stage investor a means of exiting. If you wish to gain more knowledge on why a company has recently gone public, you can research by searching the internet for the company’s IPO reasoning. The promoters have 3 advantages if the company goes public: 
  1. Raising funds to cover Capital Expenditure (CAPEX) requirements is essential.
  2. Minimising debt obligation eliminates finance charges, which translates to increased profitability.
  3. By pooling resources from a multitude of investors, the promoter can minimize the risk associated with the investment. This approach offers more advantages than relying on a single large private equity backer. Hundreds or even thousands of retail investors can invest in the same project, enabling different levels of financial commitment and significantly reducing risk.
In addition to the potential advantages of an IPO, there are other benefits that come with filing: 
  1. Provide an exit for early investor
Early investors can provide themselves with an exit when the company goes public; this allows them to sell their shares – whether they’re from promoters, angel investors, venture capitalists, or PE Funds – in the open market to get a return on their investment. There may be a lock-in period before investors can exit.
  1. Rewarding employees
The company’s employees can benefit from an ‘Employee Stock Option’ or ESOPS. With these arrangements, employees are allotted shares at a reduced rate. If the business then goes public, that can lead to capital gain for its staff. For instance, those working for Google, Infosys, Twitter, Facebook and Amazon have all gained from such schemes in the past.
  1. Improve visibility 
Going public boosts visibility, generating more attention for the firm and contributing to its development.
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