Initial public offering is also popularly known as IPO, is the first time sale of stocks, of a private company. A new company can launch IPO to raise capital to initiate its business. Moreover, Initial Public Offering can also be launched to raise money for expansion or other important operations of an existing company. The sale of stock through such Initial Public Offering (IPO) is meant for the individual and corporate investors. The aim of such issuance of Initial Public Offering is to invest the accumulated corpus for, either opening -up of a company or expansion of an existing company.
Thus, effectively, an Initial Public Offering pools investments and utilizes it in building or expansion of the said company. The shares held by such investors give them the rights of the company and to its future profits. The process which involves determination of the issue size and type, offer price and best time of introduction into the market is called "underwriting". The underwriting is generally done by the investment bankers. These underwriting firms or investment bankers are allotted some specified numbers of shares to sell, which is called as
IPO Allotment Status.
In other words, IPO Allotment Status can also be defined as the number of stocks which an investment banker is permitted to sell to the general investor before the share is being traded on an exchange. The excess shares are then allotted to other investment bankers which are eligible to sell such shares. In India, the main governing body that determines such eligibility criteria and the IPO Allotment Status is the Securities and Exchange Board of India (SEBI).
