Initial Public Offering Model (IPO Model)

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An Initial Public Offering (IPO) is a model when a company issues its share to the general public for the first time. Before going for an IPO, the company may be considered as a private Limited company generally with a small number of investors (it may be founders, families members, friends, and maybe business investors such as angel investors or venture capitalists). When a company going for an IPO, the general public will be able to buy shares and own a portion of the company for the first time. An IPO is often stated to as “going public” and the underwriting process is normally led by an investment bank.

Why companies go for IPO

Companies which are looking for growth, often use IPO to raise capital. The biggest advantage is capital raising itself. These capital raised can be used for buying properties, assets, building plants or research and development activities or maybe even to pay off debts.

Challenges of going IPO

Though there are multiple benefits to IPO, there are also some drawbacks to consider as well. One major challenge is the time, an Initial Public Offering (IPO) process can take anywhere from six months to one year. During this time, the management team of the company is expected to focus on the IPO, which may impact the other areas of business. Hence going IPO is a very strategic and cautious call. 

Are you Searching for International MBA college in Kerala.? RCBS is one of the perfect choices for you. RCBS provide MBA, MHRM, PGDM courses for the students with 100% placement. RCBS is one of the best Business school in Kerala.



Location: Kerala, India

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