GAHLOT INSTITUTE OF

MANAGEMENT &
RESEARCH
PRESENTATION ON : INITIAL PUBLIC
OFFER (IPO)
PRESENTED BY : ANKITA PARAB &
PRACHI BHOGLE
FYMMS

Initial Public Offer

Initial public offering(IPO) is a type ofpublic offering.

The first sale of stock by a private company to the public.

IPOs are often issued by smaller, younger companies

seeking the capital to expand.

Can also be done by large privately owned companies

looking to become publicly traded.

Initial public offerings are used by companies to raise

expansion capital, and to become publicly traded
enterprises.

The first modern IPO occurred in March 1602 when the

Dutch East India Company, offered shares of the company
to the public in order to raise capital.

Process Of Initial Public

Offer

When a corporation decides to go public, a portion

of it will be put up for sale to the public through the
sale of stock.

An Initial Public Offering (IPO) is the first offering of

shares of a privately held corporation to the public.

The main reason to have an IPO is to bring money

into the business.

It is often the main way that a start-up company will

be able to make the money it needs to succeed in
the market.

1.DETERMINE IF YOUR
COMPANY IS ELIGIBLE TO GO
PUBLIC.
IPO, generally the business must be
proven to
be profitable and have a
significant
amount of assets.
Since there are no set requirements to define
eligibility, consider scheduling a meeting with an
investment banker or outside consultant to
determine whether your company is of the type
that the public would want to invest in.

2.CONTRACT WITH AN
INVESTMENT BANKER.
An investment banker will help determine
how much money you should raise,
at what price the shares should be sold,
and what portion of the company should be offered in the
IPO.

The investment banker serves as an underwriter in that

it will agree to purchase all of the shares that the
company decides to offer.

3.DRAFT A PROSPECTUS AND

FILE IT WITH THE SECURITIES
EXCHANGE COMMISSION (SEC).
The SEC calls this document s-1. its purpose is to
disclose the details of the company.
In the initial prospectus -- the first document filed -- the
terms of the IPO (the number of shares and the price per
share) will likely not be finalized, but they are included as
an estimate of what the final terms will be.
In the final prospectus, filed shortly before the IPO, the
amount of shares and share price of the offering are fixed.

4.PRESENT THE
OPPORTUNITY TO POTENTIAL
SHAREHOLDERS.
Before the actual IPO, the banker and the
corporations top officials will give presentations
individuals.

to

The investment banker selects the potential

investors
based on the type of business that wishes to go public.
This process results in non-binding commitments, called
subscriptions, to purchase shares.
It is largely used as a tool to determine whether the public will
be interested in investing in the company, as well as to
determine the price of the shares.

5.SELL THE SHARES TO THE

INVESTMENT BANKER.
On the day of the IPO, the investment banker will
purchase the shares and simultaneously sell them to
investors.
The bankers purchase price is the IPO price minus the
commission, which usually hovers around 7 percent.
The shares can now be publicly traded.