Stock beginner guide – IPO

Part 6

IPO (Initial Public Offering) is a way for the company to get listed on the stock exchange. There would be an underwriter to help the company prepare the listing process. Once the approval is given for the company to list, they would start offer the share to public by IPO.

You can apply the IPO by using ATM or internet banking. Some broker house which underwrite the issue would also offer the client to take up the IPO. You can buy the share at IPO price. Once the allocation is successful, the share would be deposited directly to the CDP account holding. There is no brokerage charge but commission charge, typically $1 or $2.

Another way for a company to list is via RTO (Reverse Take over). A listed shell company would propose to buy a private company by offering large amount of share. Eventually, the private company's shareholder would get the majority of share and become major shareholder.

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