First the company in question needs to be convinced that it needs to come out with an IPO. An IPO could be structured for 2 reasons. Firstly, the company may be looking for fresh funds to finance its expansion and diversification plan. This will increase the share capital of the company. Secondly, the company could also structure it in the form of an Offer for Sale (OFS). Here there is no addition to shares but the existing shareholders offload part of their holdings in the unlisted company through the market and get it listed in the process. Quite often it is a combination of a fresh issue and an OFS.

The next step is the appointment of the investment managers. They are popularly referred to as Book Running Lead Managers (BRLM) since typically of the public issues today happen through the book building route only. The investment banker not only advises you on the timing and the methodology of the issue but also helps you get the best price in the market. These BRLMs combine legal expertise with domain kills with market insights.

The next step is to get the approval of the Securities & Exchange Board of India (SEBI) which is the nodal regulator for the capital markets in India. The regulator looks at the IPO from the point of the view of the interests of the investors at large and will raise objections over any part of the plan that is not in tune with the interests of the investor and the integrity of the markets.