An Initial Public Offer refers to the process where a company offers its shares to the public. In an IPO, the company offers shares to investors in exchange for capital. This is one of the means through which the company raises funds. Any company that fulfills the requirements of the SEBI can go public.

FAQs Archive - BC Capital PTY Ltd

Q: Do Companies list on stock exchanges without an IPO?

Yes. Companies can get listed on an exchange without an IPO as long as they meet the conditions set by SEBI.

Q: What are the opening and closing dates?

It is between these dates that investors are allowed to apply for the IPO.

Q: What is ‘Market Lot Size’ (Minimum and Maximum)?

In an IPO the total shares offered to the public is divided into lots. In an IPO the investors are not allowed to purchase shares of any quantity. They have to do it in lots. In addition, a minimum and maximum lot size is set beforehand. For eg. say Company A going public sets a lot size of 10 shares for each lot with a minimum and maximum lot purchase set at 1 and 10 respectively. This basically means that the minimum number of shares an investor can purchase is 10 and the maximum a 100. If an investor wants 65 shares he will not be able to do so. But he can purchase 6 lots which is the closest denomination. This is one of most Frequently Asked Questions (FAQs) about IPOs

Q: What is diversification?

When you invest in a mix of different types of investments, you are diversifying. Diversification means lowering your risk by spreading money across and within different asset classes, like stocks, bonds, and cash. By diversifying your portfolio, you can better weather market ups and downs while maintaining your investment's potential for growth. According to the Schwab Center for Financial Research, you should be concerned if a single stock accounts for 10% to 20% or more of your total stock investments. Generally speaking, the wider the number of holdings, the greater the diversification benefits. If you only hold two or three stocks in your portfolio, it won't be enough to reap the benefits of diversification.