The process by which a private company becomes public is known as an IPO. When a company first sells its shares on the market, it becomes 'public.' Selling shares is equivalent to selling a portion of the company's stake to investors. Markets are classified into two types.
- Primary Market
- Secondary Market
Who is eligible to invest in an IPO?
Investors are classified into three types:
-
Qualified institutional buyers (QIB)
The QIB portion consists of:
- Mutual funds
- Local financial institutions, banks, and insurance companies
- Institutional Foreign Investors
- Others
-
Investors who are not institutional(Non-Institutional Investors)
NIIs include
- Corporates
- Individuals who are not retail investors
- Others
- Individual Retail Investors