IPO Definition, Conditions, Mechanism, Advantages & Disadvantages



INVESTMENT, ACTIVELYSHARE.COM – IPO is one of the terms that you often come across when entering the world of the capital market. The term IPO refers to a company that is listed on the stock exchange for the first time.

That way, the shares, which were originally private , can finally be bought by the general public.

Not just any company can do an IPO. IDX imposes fairly strict conditions for IPO companies.

IDX certainly wants companies conducting IPOs to not be troubled companies or have good potential in the future. By reading this article, you will know more about IPOs.

What is IPO definition?

IPO or Initial Public Offering is an initial public offering held by a company. This has also made the company, which was originally a private company, become a public company whose shares can be purchased by the public.

Companies that will conduct an IPO will usually have the schedule announced by the Indonesia Stock Exchange through its official website.

Then, for people who want to buy their shares, the company will cooperate with several securities companies which are the places where the IPO shares can be purchased.

So Initial Public Offering or IPO is a condition when a company sells its shares to the public for the first time. Through the IPO, the general public can buy shares and companies can obtain additional funds.

Investing in stocks will increase your chances of profit, but don’t escape the risk. Therefore, it’s a good idea to understand the IPO mechanism before buying shares in the following article.

Please read Issuers Definition and Steps to Assess Securities Offerings

Company Objectives Conducting IPO

Some of you may be wondering, why should a company bother to enter the capital market, even though the company will be able to run as long as its business is good performance without having to enter the capital market.

You need to know that the company doing the IPO can get a large capital in that first offering. The company will use this capital as their main weapon to become even bigger. The power of the IPO cannot be underestimated.


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