Based on the following case study, answer the question.

Big Limited is requiring ₹1000 crores for modernisation of its existing projects. A meeting of its finance department head was called with the board of directors to decide how to manage the required funds. It was decided in the meeting that ₹200 crores will be raised immediately by giving privilege to the existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹300 crores will be raised by allotting securities to institutional investors. Half of the balance required funds will be raised by a direct appeal to investors by means of a advertisement in newspapers and rest to issuing houses and stock brokers at an agreed price.

Give the full form of IPO.

Initial Public Offer

The correct answer is option (3)- Initial Public Offer.

The full form of IPO is Initial Public Offer.

A company proposing to issue capital to the public through the on-line system of the stock exchange has to enter into an agreement with the stock exchange. This is called an Initial Public Offer (IPO). SEBI registered brokers have to be appointed for the purpose of accepting applications and placing orders with the company. The issuer company should also appoint a registrar to the issue having electronic connectivity with the exchange. The issuer company can apply for listing of its securities on any exchange other than the exchange through which it has offered its securities.