IPOs

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.

  1. Primary Market
  2. Secondary Market

Who is eligible to invest in an IPO?

Investors are classified into three types:

  1. Qualified institutional buyers (QIB)
    The QIB portion consists of:
    • Mutual funds
    • Local financial institutions, banks, and insurance companies
    • Institutional Foreign Investors
    • Others
  2. Investors who are not institutional(Non-Institutional Investors)
    NIIs include
    • Corporates
    • Individuals who are not retail investors
    • Others
  3. Individual Retail Investors