What is an IPO?

What is an Initial Public Offering (IPO)?

An Initial Public Offering (IPO) is the first offering of a company's ordinary shares to investors.

The following are often cited as key benefits of admission to a public market:

  • Listing provides access to capital growth, enabling companies to raise finance for further development, both at the time of admission and through further capital raisings.
  • The transfer of ownership of a business from a Government to a privately owned entity which is often achieved through listing the new private company on the stock market.
  • Creating a market for the company's shares thus broadening the shareholder base.
  • Placing an objective market value on the company's business.
  • Increases the company's ability to make acquisitions, using quoted shares as currency.
  • To increase and improve the public image of the company.

Please note this is an advertisement and not a prospectus, and you should not make an investment decision on the information contained here without consulting the relevant risks in the prospectus.

Benefits and risks to investors investing in an IPO


  • No stamp duty payable
  • No commission charged on your initial investment


  • There may be a lack of historical data on a company that is subject to an IPO.
  • During the period between the intention to float being announced and the start of the offer, the intention may be withdrawn.
  • You may not receive the full amount that you have applied for as the company may scale back the applications if the offer is oversubscribed.
  • Share prices can fall as well as rise. The listing price of the stock may be lower than the issue price.
  • Tax treatment depends on the individual circumstances of each client and may be subject to change in future.
  • You are not guaranteed to make a profit; the value of your investments can go down as well as up. You may not get back all the funds you invest.

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The value of your investments can go down as well as up. You may not get back all the funds you invest.