Steps in Initial Public Offering (IPO)

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Initial Public Offering is a process where an unlisted company is issuing its shares to the general public for the first time. Before going IPO the company might be a private limited company. After the IPO the company is known as Public Listed Company with any of the recognized stock exchanges. Going public or going IPO is long and a tedious process, below given are some of the major steps involved before a company going public;

1. Select an investment bank: Any company before going for an IPO must choose an Investment bank who would be advising the company on its IPO and to provide underwriting services.

2. Due diligence and regulatory filings: Under this step, the following underwriting arrangements are available to the issuing company

a. Firm Commitment:
b. Best Efforts Agreement
c. A syndicate of Underwriters:

3. Pricing: Once the IPO is approved by the SEC, the effective IPO date is decided.  Before the effective date, the company and the underwriter decide the offer price (the price at which the shares will be sold) and the accurate number of shares to be sold.

4. Stabilization: After the issue has been brought to the market, the underwriter provides analyst recommendations, after-market stabilization and creates a market for the stock issued.

5. Transition to Market Competition: The final step in the IPO process. During this time, investors transition from trusting on the mandated disclosures and prospectus to relying on the market forces for information regarding their shares.


Rajagiri Business School Cochin, is one of the best b schools in Kerala offers various graduation courses like MBA, MHRM, IMBA, PGDM etc. So if you are planning to do your MBA or PG program in best business school Kerala, Rajagiri Business School in the right choice for you in the city.


Location: Kerala, India

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