What is the full form of IPO?


You must be wondering about the meaning of IPO whenever you have seen any announcement on television. In this article, we are going to discuss everything related to IPO.

IPO full form is Initial Public Offering. IPO is the process of offering shares for a corporate world in a new stock issuance. It permits the company to put up revenue from the public investors. The key features of the IPO are to meet the provisions of the SEC (Security and Exchange Commission). IPOs allow all the companies to get funds through the primary market. IPO is the procedure when the company plans to launch its share to sell to the public and gets the company listed on the stock exchange. In general, the new or the starter companies offer an IPO.

Every company needs an IPO as it helps in raising revenues.

The company's shares are exchanged and auctioned in the open market. Through the IPO, the investors as well as the issuer can be benefited.

You can use the revenue which comes from IPO in development, marketing programs and research. You can pay your debts also if you have any.

What is the full form of IPO?

IPO basically stands for Initial Public Offering. IPO's full form in finance is the same as in the stock market.
A company leases an investment bank before it becomes an IPO to deal with the IPO. The bank as well as the company, both check out the monetary matter of the IPO.

Later, they registered with the SEC. The work of the SEC is to evaluate the disclosed data and recheck it again and again. If it is found alright, then it permits a time to declare openly the IPO. 

Do you know the meaning of IPO in the stock market? Let’s take an example. You all are acquainted with the terms, primary market and secondary market. If you are willing to be an investor and want to purchase the company's shares, all you need to do is to become the company's shareholder. 

You should note down that the price is going to vary regularly. You will not get the exact amount as prices change due to various reasons. If you are planning or desire to have a home in the coming years, then you can invest your money in a reliable company for the long term. You can purchase your dream home or any expensive assets without any hassle.

IPO full form example
We all have read the full form of the term IPO. But the meaning or the full form of IPO is different in different subjects.
For instance, in the computer, the full form is Input Process Output. The IPO's full form in Economics is also an Initial Public Offering. The IPO full form Hindi is the name, just the difference is that it is pronounced in the Hindi language. 
We have already mentioned that the price ranges differently on different days. So investing your money in an IPO is quite risky because as an investor, you do not have any idea how much demand will come for the stock after the initial offering. The main threat or risk comes from the resale value of the stock as it is full of uncertainty. 

There are two types of IPO. We will discuss that.

  • Fixed Price Offering

As the name suggests, Fixed Price Offering are those who h are referred to as an issue price. Some companies set their prices. The investors pay a visit and want to know about the stock's price that the company has agreed on to the public.

The demand for the fixed price offer can be known when the issue will be closed. A complete price is required to pay by the investor when they are applying for the IPO.

  •  Book Building Offering 

The company introduces an IPO which gives a 20% price band to the investors from the stock. The investors who are willing have to bid on the shares before the decision of the final price. The investors have to mention how many numbers of shares they are interested to purchase. They also have to mention their price.

The low price share is called floor price whereas the high price share is called cap price. The investor's bids will tell regarding the price of the shares.

If you want to invest in an IPO, then you should follow these certain steps.

  •   Decision or Determination 

The first step should have to decide about the IPO which he determines to apply. The investor can also go through the prospectus to get a full idea. There is lots of information available in the prospects, which will help the investor to decide his mind. After the decision, the investor should perform the next step.

  •    Fund/Revenue

After the decision, the investor has to arrange for the capital or the funds. The investor can utilize his savings to purchase the share. If the investor does not possess a great saving, then he can take loans from any bank. 

  •  Demat-cum-trading account

Without Demat-cum-trading account, an investor can't apply for the IPO. The investor has to submit his Aadhaar card, voter card, PAN card, or any kind of identity proof.

  • The Application 

The investor after fulfilling the other procedures can apply for an IPO from the bank account. 

  •   Bidding

Bidding can be done according to the lot size which is referred to in the prospectus of the company. A price range will be decided and the investor has to apply for the bid. 

While you are investing your money in IPO, you should make good planning and take care of certain things. There are always risk factors and you have to work according to that.


Many people don't have much knowledge regarding the IPO. We have given all the details here. You can check out. An investor mainly invests his money if he wants to purchase an expensive item, like cars or a house.