An IPO launch is a very methodical and complex process that takes diligent planning and execution. Going public isn't easy and even the smallest mistake or negative press can deter future investors.
The Indian financial landscape is no stranger to IPOs. Some of the biggest Indian IPOs were worth over ₹10,000 crore with the largest one being Coal India IPO valued at over 15,000 crore. Reliance power, General Insurance Corporation and Oil and Natural Gas Corporation IPOs as close competitors.
But who are the people involved in the execution? Just how much effort does it take to launch an IPO? This blog will answer these questions and more. Before we find out more about the intermediaries involved in an IPO, let's understand what an IPO means.
What Is An IPO?
An Initial Public Offering allows a privately owned company to a become public. This is commonly referred to as 'going public'. The company issues IPO shares in 2 ways:
1. Fixed Price
2. Book building
Once public, the company can get capital investments from public investors and trade on the stock exchange.
While buying in cheap and banking on growth are features of an IPO, it is important to know that not every IPO will result in a great profit. Although you could potentially earn high returns, the risks are also high.
Regulations and guidelines created by the Securities and Exchanges Board of India (SEBI) must be followed when a company decides to go public. Keeping these guidelines in mind, there are four intermediaries that are associated with an IPO. Let's look at each IPO intermediary in detail.