"What does an IPO mean?", is the question that may arise in the minds of each of us. Actually, IPO stands for 'Initial Public Offering'. Under this offering, a company can collect funds for itself, in the form of either debt or equity from the public. This is done by a company who earlier has never brought out a public issue before. This method of going public helps the top leading companies, both private and public, to raise funds for materialising their future plans in no time.

The main credit of spreading awareness about the IPOs goes to the media and of course to the Internet. Internet, it is because due to this channel, you as a buyer can participate in the process of buying the shares of a company. The recent example of Reliance Energy IPO bid, complements my statement. Within one minute of the bid opening, the whole IPO was sold out. Thanks to the Internet, which helps people like us and many other to openly take part in this bid on the virtual medium.

The IPO is the most preferable way, as companies especially the public companies can raise huge funds, courtesy this method. However, public companies mostly face difficulties, owing to the fact that they have to compulsorily go through the examination from the public eyes. Moreover, trading in the open market increases the chances of being exposed to more liquidity, which ultimately makes it conceivable to enforce various welfare plans for its employees and for the firm too.

The IPOs are playing a very vital role in the shaping of the liberalised economy. At present, the Oil India Ltd IPO in the first half of the month of November, is making headlines these days. The company which produces approximately four million tonnes of crude oil on yearly basis, is planning to sell around 10 percent of its total share of 98 percent (hold by government) to the likes of Indian Oil Corp., Hindustan Petroleum and even to Bharat Petroleum. The sale of issue, which is to be done at IPO price, is currently making headlines these days in all the leading financial dailies of the country.

Even the government is promoting the cause of investing into IPOs, stock market, mutual funds and many other investment options through the popular public interactive mediums like Radio, Television, newspapers and even from Internet. The main reason behind this whole thinking is to educate people about various aspects of investment. So that even they could make the most of it. Hence, IPOs are the way to look for.