Initial Public Offerings (IPOs) have come a long way in India since the early days of fixed pricing. Over the last 2 decades, we have seen a number of major shifts in the IPO market like the introduction of book building, reduction in the number of days to listing, ASBA and the list can go on. But firstly, what exactly is an IPO?

An Initial Public Offer (IPO) is a flotation in which the company or the issuer raises money from the public. When a closely held company comes out with a flotation for the first time to raise funds, it is referred to as an Initial Public Offer (IPO). When an already listed company comes out with a new issue to raise additional funds from the market, it is referred to as a Follow-on Public Offer (FPO). Both the IPO and the FPO entail fresh raising of funds. However, there is also the case of a public issue where the existing shareholders look to exit their holdings, which is the case with many PSU companies. This is referred to as an Offer for Sale (OFS).