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What Is IPO? And How To Earn Millions By Investing In IPO?

An IPO or initial public offering is when a company sells its first shares to the public. This usually happens when a company wants to raise money to expand or invest in new projects.

To do an IPO, the company must first appoint an investment bank to act as an underwriter. The investment bank will then help the company set a price for the shares and promote the sale to potential investors.

The IPO process usually takes a few months to complete. Once the shares are sold, the company will be listed on a stock exchange and the shares will be traded publicly.

If you are looking to invest in an IPO, it is important to do research and understand the risks involved. This article will give you a basic overview of what an IPO is and how it works?

What Is IPO
What Is IPO


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IPO means in Share Market

The full meaning of IPO is Initial Public Offering, any company can collect money by selling its part or shares through the share market. Whenever a company sells its shares in public for the first time, then this process is called Initial Public Offering (IPO). Companies bring many different IPOs such as for business expansion, to pay off old loans, to launch new products and services, or to buy a company.


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How does a company issue IPO?

Whenever a company plans to bring an IPO, it has to make a detailed document that contains all the details of the company, such as company history, financial details, future plans, etc. This document is called DRHP (Draft Red Herring Prospectus). Companies have to submit this document to SEBI; SEBI (Securities and Exchange Board of India) is a government body that regulates the stock market, just like RBI regulates all banks. SEBI reviews the submitted DRHP and gives permission to bring it in the IPO, after getting the permission the company is ready to bring the IPO.

Bringing IPO is a complex process that is why companies hire investment banks to bring IPO, whose job is to help companies in bringing IPO. Investment banks together with companies make the entire plan of the IPO and then the IPO is made open to the public so that the public can apply in it. IPO is open for a minimum of 3 days maximum of 10 days; this period is also called the issue period of IPO. If you want to invest in IPO, then you have to apply during the issue period itself.

After the IPO is opened, the public applies to it, the thing to note here is that it is not necessary that if you have applied in the IPO, then you will get the shares. This happens because often the company has many more public applications than the number of shares being issued, when this happens the allotment of shares is done randomly from the computer. If you have applied for two lots in IPO then you may get only one lot of shares or not even one lot.


How does a IPO work? | How to earn millions by investing in IPO?

Yes, friends, you can earn millions of rupees from IPO, just pay attention that you should buy shares of the same company from IPO, whose future growth chances are very high and the company which has grown well in the past; At the same time, you will also have to hold the shares taken for a long time, because if you do not invest in a good company and hold it for a long time, then you will not be able to get very good returns.

As an example, you can take Wipro, if someone had bought shares of Wipro even for Rs. 5000 at the time of IPO, then today he would have been a millionaire and many people have become such millionaires whose list is very long. So, friends, crores can be earned from IPO, only need to be patient and make the long time investment.


Where to apply for IPO?

You can apply online or offline in IPO. Every bank provides the facility to apply online for IPO and you can fill the form for offline application from the broking firm. Not every broker has the facility to apply for an IPO, that's why it would be a good idea to verify with your broker.



Million-$-Knowledge is an Education Program and is NOT registered under any SEBI rules. All the information we provide is for educational purposes only and you should consult your financial advisor before making any investment decision. Also, WE DO NOT PROVIDE any kind of Stock Advice or Stock Advice or Portfolios. Description & Pressed Comments may contain affiliate links, which means that if you click on one of the product links, we will receive a small commission.


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