InvestorQ : Why does a company come out with an IPO and what is the core purpose?
Arusha Ray made post

Why does a company come out with an IPO and what is the core purpose?

Answer
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Mahil Khan answered.
1 year ago


IPOs or Initial Public Offerings are new issues brought out by companies to list on the stock exchanges. The IPO subscription is split across 3 categories and then the total oversubscription is judged. When you read about an IPO oversubscribed it means that the genuine demand for the IPO was more than the supply. So, if the issue size was 10 lakh shares and there was genuine demand for 1 crore shares then the IPO is said to be oversubscribed by 10 times. Normally, greater oversubscription is a sign of greater investor interest and does impact the listing price of the stock.