An Initial Public Offering (IPO) is made an unlisted company seeks fresh issue of shares for raising capital for investment or expansion of business. The company decides at what price it would offer the shares to investors and they are traded at a designated stock exchange for an initial period of 3 days to 21 days. In case of government financial institutions the minimum period is 3 days and the maximum period of initial public offer is upto 10 days.
The company has to abide by a number of regulations formulated by SEBI, who oversees the whole process to ensure greater transparency keeping public interests in mind.
Investors should remember these points before applying for an IPO: