What is IPO? How it is different from equity/stock?

please tell me in brief about IPO offered by companies. can we sell at any time after purchase as like we do in case of shares…

IPO is a process by means of which a company offers its shares to general public for the first time. Because they are offering the shares for the very first time its called " Initial Public Offer". 

If you are interested in subscribing for the IPO of a company you need to bid for it in the IPO process. If you are alloted shares then you can sell them, if you wish, on the day of listing.

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An IPO, as you know is Initial Public Offer.

Companies or organizations when they need funds to expand their business or start a business, they approach NSE like stock exchange, requesting to provide money (funds) to them, by raising the capital from general public (also from qualified institutional investors and foreign investors).

For example if some 1 crore rupees to be collected, then NSE and company will jointly decide, and split this 1 crore into smaller number of units of money. These units are called shares. Say one share is 50 rupees, then the company will issue around 2,00,000 lakh shares in the IPO. Among these 2,00,000 shares there will be reservations to Foreign Investors (say 30%), Promoters (who own the company, say 30%), Institutional Investors (say 30%) and remaining shares are reserved to general public, who are retail investors (say 10%).

Since the number of shares is already fixed, sometimes demand for those shares will be high. Example investors have bid for 10,00,000 shares in total. So it is 5 times the offered number of shares which is only 2 laks. So if a retail investor like you have applied for a bid of 200 shares, probably you may be allocated with 200/5 = 40 shares approximately. (since they try to give shares to all the bidders at maximum bid value)

Once your IPO purchase is confirmed, say for those 40 shares, you can sell those shares when it is listed on NSE or keep them for how long you want it to be. The listing of the share in NSE will happen after sometime from the day of IPO issue. You can keep the shares with you any number of days or even months or years, if you see the trend of price is good.

Usually IPO price and listing price will have huge difference, so people immediately sell on the listing day and book profits.