How to Apply For an IPO

Initial Public Offering (IPO) is offering of a company’s shares to public at the time of its listing on the stock market. Any company offering any number of shares to public has to offer them through IPO, after fulfilling all regulatory requirements of the securities and exchange commissions or any other regulatory authority that governs the company’s stock market listing. The share price offered through IPO is generally determined lower than the trading share prices, which is determined by the market itself when trading in the company’s shares starts.

Instructions

  • 1

    Preparing of Company's Financial Statements

    Preparation of company's financial statement is essential before you start floating the IPO. All your statements included total financial assets of the company including debts, and audited reports, which you can present at the time of the IPO offering.

  • 2

    Prospectus of Start-ups

    If you are offering an IPO of a completely new business you have to prepare a prospectus for that including sources of funding. The prospectus should also include the number of shares you are offering to public, at what price each share and total funds you expect to generate through IPO. Also mention if you have sought investment from institutional investors through exclusive offering.

  • 3

    Seek Help From Underwriters

    Underwriters or generally big securities companies or investment banks handle the entire offering of IPO. They will help you to determine right market price and strategic planning of the IPO offering. No company can handle the IPO offering on its own, and underwriters' services are must to successful completion of the process.

  • 4

    Establish Contract Agreement with Underwriters

    After selection of the underwriters, you will need to establish a contract agreement with them. This is a detailed contract that explains the entire process of the IPO offering, determination of share prices and payment against services of the underwriters. It may also include other details as well.

  • 5

    IPO Application

    After completion of the documentation process and fulfilling of other requirements, you can make an IPO application through your underwriters. The time period for offering of the shares can be determined by you. It can be a week or 15 days. Often, companies receive applications more than targeted investors and it is up to the company's policy whether to accept the oversubscribed applications or reject them.

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