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An initial public offering, or IPO, is a standard way that a corporation goes public and sells shares to raise capital. A fixed price IPO and a book building IPO are the two most common types of IPOs. A business can utilise either kind alone or in combination. An investor can buy shares in an IPO before they are available to the general public on the stock market.<br>
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The Two Types of IPOsAn initial public offering, or IPO, is a standard way that a corporation goes public and sells shares to raise capital. A fixed price IPO and a book building IPO are the two most common types of IPOs. A business can utilise either kind alone or in combination. An investor can buy shares in an IPO before they are available to the general public on the stock market. Participating in an IPO - When investing in an IPO, an investor needs be aware of various details, including the issue name, issue type, category, and price band, to mention a few. The name of the issue is the company that is going public. The issue type refers to the type of initial public offering (IPO): fixed-price or book-building. Retail investors, non-institutional investors, and qualified institutional purchasers are the three types of IPO buyers. The pricing band refers to the price range that has been established for book building concerns. Because not all retail brokers make initial public offerings to their clients, IPOs are typically given to qualified or institutional investors first. Because they do not yet have a track record of success or a history of publicly available financial records, IPOs can be riskier than established stocks.
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