Introduction

Investing in an Initial Public Offering (IPO) is one of the most exciting opportunities in the stock market. An IPO marks the moment when a private company opens its doors to public investors, offering its shares on a stock exchange for the first time. This transition allows businesses to raise substantial capital, expand their operations, and gain credibility in the market.

For investors, IPOs present a chance to invest in high-growth companies at an early stage, often before their stock prices appreciate significantly. While the potential for high returns exists, IPOs also come with risks due to market volatility and uncertain post-listing performance.

In this blog, we’ll break down everything you need to know about IPOs, how to apply for them, and highlight some of the most anticipated upcoming IPOs in 2025 that could shape the stock market in the coming year.

2. Understanding IPOs

2.1 What is an IPO?

An Initial Public Offering (IPO) is the process through which a privately held company transitions into a publicly traded entity by offering its shares to the general public for the first time. This event allows the company to access a broader pool of investors and raise substantial capital.

Investment banks play a crucial role in the IPO process. They act as underwriters, helping the company determine a fair share price, ensuring regulatory compliance, and managing investor interest. The primary objectives of going public include:

• Raising Capital: Companies use IPO proceeds to fund expansion, product development, and operational improvements.
• Debt Repayment: IPO funds can help in reducing financial liabilities.
• Brand Visibility: Being listed on a stock exchange enhances the company’s reputation and attracts potential business partnerships.
• Liquidity for Early Investors: Initial stakeholders, including founders and venture capitalists, get an opportunity to sell their shares and realize gains.

2.2 How IPOs Work

The IPO journey involves multiple steps, ensuring that the company meets financial regulations and attracts investor interest:

1. Preparation:
   • The company assesses its financial health, prepares business reports, and formulates growth strategies.
   • It hires investment banks to guide the IPO process and determine valuation.
2. Regulatory Approval:
   • The company files a registration statement with the Securities and Exchange Board of India (SEBI) or the Securities and Exchange Commission (SEC) in the U.S.
   • Financial disclosures, risk factors, and intended use of funds are submitted for regulatory review.
3. Marketing (Roadshow):
   • The company conducts a roadshow, where executives and underwriters present the investment opportunity to potential investors, including institutions and mutual funds.
   • This stage helps gauge investor interest and demand.
4. Pricing:
   • Based on market demand, the final share price is determined.
   • Companies may opt for fixed-price IPOs (pre-set pricing) or book-building IPOs (pricing based on investor bids).
5. Going Public (Stock Exchange Listing):
   • The company officially debuts on a stock exchange (e.g., NSE, BSE, NYSE, NASDAQ).
   • Shares become available for trading, and market forces determine their price moving forward.

An IPO is not just a financial event but a strategic move that impacts a company’s long-term growth and investor confidence.

3. Advantages and Disadvantages of IPOs

An Initial Public Offering (IPO) presents a transformative opportunity for companies, yet it also comes with notable challenges. Here’s a closer look at both sides of the coin:

3.1 Advantages of IPOs

• Access to Large-Scale Capital:
  By offering shares to the public, companies can tap into a vast pool of funds, fueling expansion, innovation, and debt reduction.
• Enhanced Brand Visibility and Credibility:
  Becoming a publicly traded entity boosts a company’s public profile, building trust with customers, partners, and investors while positioning the brand as a market leader.
• Attraction and Retention of Top Talent:
  Offering stock options as part of compensation packages helps attract skilled employees who are invested in the company’s long-term success.
• Opportunities for Future Fundraising:
  A successful IPO not only provides immediate capital but also paves the way for future fundraising through follow-on offerings or other financial instruments, ensuring ongoing growth potential.

3.2 Disadvantages of IPOs

• High Initial Costs:
  The process of going public involves significant expenditures on legal, regulatory, and marketing efforts, as well as underwriting fees, which can strain a company’s finances in the short term.
• Stringent Regulatory Compliance:
  Once public, companies must adhere to rigorous financial disclosure requirements and regulatory standards, which can limit operational flexibility and expose sensitive business details.
• Exposure to Market Volatility:
  Public companies face continuous scrutiny from investors and market analysts, with share prices subject to unpredictable fluctuations driven by market sentiment and broader economic conditions.

Understanding these advantages and disadvantages is crucial for companies weighing the decision to go public and for investors looking to navigate the complex world of IPOs.

How to Apply for an IPO

Navigating the application process for an IPO in India can be straightforward if you know the steps involved. Whether you choose to apply online or offline, it is important to be well-informed and meticulous with your application details. Here’s a clear guide to help you understand the process.

4. How to Apply for an IPO

Navigating the application process for an IPO in India can be straightforward if you know the steps involved. Whether you choose to apply online or offline, it is important to be well-informed and meticulous with your application details. Here’s a clear guide to help you understand the process.

4.1 Online Application Process

• Access Your Brokerage Account:
  Begin by logging into your online brokerage account. Most modern brokerages offer a dedicated section for IPO applications.
• Navigate the IPO Section:
  Once logged in, locate the IPO section. Here, you will find a list of current and upcoming IPOs. Select the one you are interested in.
• Submit Your Application:
  Fill in the necessary details, including your PAN number, bid quantity, and other personal information as required. Review your application carefully before submitting it via digital payment methods such as UPI or using the ASBA (Application Supported by Blocked Amount) facility.

4.2 Offline Application Process

• Collect and Complete the Form:
  Alternatively, you can obtain a physical application form from your broker or bank. Fill out the form with the required details, ensuring accuracy in every section.
• Submit with Payment Details:
  Once completed, submit the form at the designated branch along with the requisite payment details. Ensure that you follow the instructions provided to avoid any discrepancies during processing.

4.3 Important Considerations

• Application Restrictions:
  It is essential to note that each investor can submit only one application per PAN number. Submitting multiple applications may lead to rejection, so ensure that you adhere strictly to the guidelines.
• Track Your Application:
  After submission, keep a close watch on your application status. A unique application number is typically provided, which you can use to track the allotment results and stay updated on any further requirements.

By following these steps and paying attention to the finer details, you can confidently apply for an IPO and take a significant step in your investment journey.

5. Upcoming Share market ipo in 2025

As the financial landscape continues to evolve, 2025 promises a vibrant lineup of new public offerings that could redefine investment strategies. From tech giants making their debut to established companies scaling new heights, investors in India have plenty to look forward to.

Read this also : Active Infrastructure IPO to open on March 21, price range fixed at Rs 178-181 per share

5.1 Notable Upcoming IPOs

Several high-profile companies are gearing up to hit the market in 2025. Among the most anticipated are:

• Stripe: With a projected valuation of approximately $65 billion, this fintech powerhouse is expected to captivate investors with its innovative payment solutions.
• Instacart: As a leading player in the grocery delivery space, Instacart’s public debut is eagerly awaited, offering early access to a rapidly growing market.
• Reliance Jio: Anticipated to be one of the largest IPOs in the country, Reliance Jio’s listing could reshape the telecommunications landscape, with an estimated valuation nearing $112 billion.

These listings not only signal substantial capital-raising opportunities for the companies involved but also provide retail and institutional investors with a chance to participate in transformative growth stories.

5.2 Upcoming IPO List (Table)

Below is a detailed table summarising some of the key upcoming IPOs in 2025:

This table provides a snapshot of the anticipated dates, IPO types, issue sizes, and price bands, helping investors plan and track these opportunities with greater ease.

These offerings underscore the dynamic nature of the IPO market in India, where both emerging enterprises and established brands are setting the stage for a transformative year ahead.