What is Share & what is an IPO?
Share is nothing but a unit(ईकाई) of larger amount -(हिस्सेदारी).
Say, A company named Online Saathi Private Limited has been started with 5 promoter each invested 20,00,000/- each i.e., with a capital of Rs. 1 crore.
Now in Nepal generally, 1 unit share quoted at 100 rupees (this not fixed however)
So, number of shares here will be 100,000 shares(कित्ता) at Rs. 100 each hence each promoter holds 20,000 units.
For Example: – let’s suppose company is doing good and has more possibilities to grow however company lacks fund for expansion and that fund is Rs. 10 Crore. Company has two options here.
1. Loan raise
2. IPO (Initial Public Offer) of 10,00,000 shares@ 100per share
- Problems for a company to raise loan
Needs Collateral (धित्तो)
Needs to Pay Interest
User needs to repay amount
Risk- lies with promoters
- IPO (Initial Public Offer) will be always a better option
No worries for repayment
Risk share
Investment opportunities to public
In simple word IPO means initial(पहिलो) offer made by company to the public to buy its shares, Initial because it is first offer of share to the public.
In our case 10 Lakh share will open for a public to buy at 100 rupee per share so that company can raise the fund of Rs. 10 Crore for expansion & growth.
Who Can Apply for an IPO?
Anyone having D-Mat Account with bank can apply for an IPO made by company. Currently all banks in Nepal provide D-Mat Account to the users.
Applying IPO is Good or Bad?
IPO mostly is safe and good options to invest if share is not overrated by book building. I think all the people will must apply IPO and consider it as a good investment. It is less risky and can give you good amount of return as a dividend(लाभांश), Bonus(additional share) & capital gain(पूंजी लाभ). Click here to View class
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