Initial Public Offering
The first sale of a company's shares to the public, after which the shares are listed and traded on a stock exchange.
Formula
Total IPO size = Fresh Issue Amount + Offer for Sale Amount
Unit
₹ crore
In depth
An IPO is two distinct transactions bundled into one document: a fresh issue, where the company sells new shares and keeps the money, and an offer for sale, where existing shareholders sell their own shares and keep the money themselves. Reading the split matters, because an offer-heavy IPO funds an exit rather than the business. The price is set by the company and its bankers with the benefit of full information and a chosen moment, which is why the issue price is not a neutral estimate of value. Allotment in an oversubscribed retail portion is by lottery, so applying for more lots does not proportionally increase what you receive.
Worked example
An IPO of ₹1,000 crore comprises ₹400 crore fresh issue and ₹600 crore offer for sale. Only the ₹400 crore reaches the company; the remaining ₹600 crore goes to the selling shareholders. The business is funded by 40% of the headline number.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Initial Public Offering” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.