Abstract

The Capital markets plays a significant role in developing a nation’s economy. It has been seen among nations, that a well-developed capital market is nothing less than a nation’s true asset. In today’s world of corporates, IPOs have become a means to promote the valuation of the company by bringing in huge sums of money from the general public in return for a small piece of the company’s ownership. An Initial Public Offering (IPO) is a public offering that is issued by a private company to raise capital from general public to become a public company. This provides the investors a golden opportunity to enter the capital markets at an early stage, which may lead to better returns in the long run. This paper aims to provide an understanding of the concept of IPOs in the capital market and state the eligibility of a private company to launch such an IPO. It further talks about the pricing of every IPO and helps understand the allotment mechanism of such shares to the general public upon application. This paper also provides with an empirical research to help understand the perspective of individual’s towards investors towards IPOs.

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