Furthermore, the banking and financial system must facilitate transactions in an economy by ensuring that they can be effected safely and swiftly on an ongoing basis. The significance of the financial system for an economy arises from at least three major sources. First, it performs various transformation functions relating to intermediation of funds in the economy. Secondly, it provides the mirror image of the underlying real economy and the basic macro-economic balances. Thirdly, it is one industry whose basis of operation is underpinned in public trust.
Objective of the Project
The objectives of carrying out study are as follows:-
1. To be well versed with concept of IPO.
2. Aspects of IPO from Company’s & Investor’s point of view.
3. Factors affecting IPO listing Price.
4. Comparison between IPO’s of two companies from the same sector for feasible investment decision.
Concept of IPO
1 IPO is an acronym for (Initial Public Offering).
2 The Initial Public Offering or IPO market as it is known, received a new lease of life in FY99.
3 An IPO is when a company makes either a fresh issue of securities or an offer for sale of its existing securities to the public for the first time. It refers to first sale of stock by a company to a public.
4 IPO MEANS “GOING PUBLIC”
5 For a company to offer IPOs, they need to hire a corporate lawyer as well as an investment banker to underwrite the offer. The actual sale of the shares is generally offered by stock exchange or by regulators. When the company starts to offer IPOs, they are usually required to reveal financial information about the company so that investors know whether the companies a good investment or not.
6 This paves the way for listing in stock exchange in the first case, & trading of the issuer’s securities in the second.
7 With high profile issues like Hughes Software and TV-18 opening at more than 3 and 10 times their issue price respectively, investors are flocking to the IPO market like never before. Companies, which had earlier shied away from the capital market, are now returning with a vengeance to satiate the appetite of investors.