An Initial Public Offering (IPO) is the process through which a private company offers its shares to the public by listing them on a stock exchange for the first time. In an IPO, the company issues new shares to raise capital, which can be used for various purposes such as expansion, growth initiatives, debt repayment, or other strategic objectives. In addition to raising capital, an IPO provides liquidity to existing shareholders, such as founders, early investors, and employees who hold equity in the company. Once the company goes public, these shareholders have the opportunity to sell their shares on the stock exchange, thereby realising the value of their investment.
For you, as an investor, IPOs provide an opportunity to invest in companies during their early stages of growth, potentially accessing high-growth opportunities in new and innovative sectors, before they become widely recognised in the market. If the company performs well and the stock price appreciates, the IPO is has the potential to deliver significant returns. In fact, many investors have benefitted from listing IPO shares. Moreover, investing in IPOs allows you to diversify your investment portfolios by adding exposure to new companies and industries that may not be represented in your existing holdings.
MWPL applies to all market participants, including institutional investors, proprietary trading firms, and retail traders, who trade in derivative contracts such as futures and options. It sets a cap on the total open positions that can be held by any market participant across all derivative contracts traded on the exchange.
However, it's essential for you to conduct thorough research, assess the company's fundamentals, and carefully consider the risks before identifying an IPO to invest in. This is where an IPO screener can be of immense help to you.