Initial Public Offering (IPO) Definition - Glossary

Initial Public Offering is when a company first sells its shares to the public to raise capital.

Initial Public Offering is the process by which a private company offers its shares to the public for the first time. This marks the transition from a privately held entity to a publicly traded one. Companies pursue IPOs to raise capital for expansion, pay off debt, or increase their market visibility. During an IPO, investment banks typically underwrite the process, determining the initial share price and helping allocate shares to institutional and individual investors. Once the IPO is complete, the company's shares are listed on a stock exchange, allowing the public to buy and sell them.