Question

Why does the company want an IPO? Is it for growth, or is it for transparency? please explain in details and carefully.

After that, give the conclusion and recommendation, Does the company need to do an IPO or not

Please give also the references.

Answer 1

The company will be wanting an initial public offer because it want to expand its existing business and it is also helping in expansion of the business through raising of the capital by dissolution of existing equity stake of the promoters and raising financing through public.

It will also help in generating a higher amount of funding and this method can be used for further funding as well.

Initial public offer is made by the perspective of the company for growth not for transparency because there are a whole lot of procedures which are needed to be followed during initial public offer and which will not be desirable from the company's perspective.

Initial public offer will offer the company with window to generate higher amount of fund from a wider amount of public and it is also helpful in company to reach a large amount of investors who will be tracking the performance of the company regularly and who would also be trying to place a premium on valuation of the company if the company is performing beyond the expectation and it will also be helpful in transparency as well so the company should be trying to list itself in order to expand the business and help itself grow into multiple segments.

Yes, the company should be doing an initial public offer if it is in need of funds and if it has no problem in dilution of stake and it is wanting for aggressive expansion for the business and making public disclosures as well.