ROLE OF INVESTMENT BANKS IN IPO

ROLE OF INVESTMENT BANKS IN IPO

Shreya Hegde

ABSTRACT:

              An investment bank is financial intermediary which specializes in the field of selling securities and underwriting the issuances of new equity shares to raise capital funds. With the intention of financial expansion, growth perspective and to acquire financial resources company would like to go for public. Initial Public Offering (IPO) is one of the excellent ways of raising reasonable amount of capital. If company want to go for public it needs to give clear idea about entire valuation of a company to its stakeholders. Company uses this valuation as acquisition currency. At the time of IPO company need to go through several procedures and need to submit several documents and mainly it needs to find potential investors. All these things are cannot be done by company alone because of lack of expertise and knowledge. So, company will hire investment banker who will assist the company throughout the process of IPO. This study reveals the role of investment banker during IPO and functions need to be performed by him. The present study is descriptive in nature and used secondary data. It concludes that role of investment banks in IPO is very significant.

KEY WORDS:

Initial Public Offer (IPO), Investment bank, Capital market, Promoter, Acquisition.