What are the Difference between IPO and Listed Stocks?

What are the Difference between IPO and Listed Stocks?

Investing in stocks is a great way of getting started with investing. If you have always been a fan of exploring new markets, diversifying your portfolio, and looking forward to investing in new companies being listed – you are in the right place. Here, we can talk about the differences between IPO and Listed stocks, and tell you the benefits of investing in them. So, buckle up – let us get started!

Why Do Companies List Stocks?

First things first, do you know why a company lists stocks? Okay, let’s get to that before we could know anything else. A company lists stocks to raise money for various purposes.

For instance, you earn income every month, out of which a portion will go to rent, household expenses, groceries, and much more – you will definitely save some from investments from what is leftover. Just like that, a company pays portions out of proceeds from an IPO for various other purposes. When the requirements of the company are met, it will make sure that it grows and profit is also achievable and on track. It gives investors benefits. Let us look a little more at the benefits you will take from investing in IPOs.

How is an IPO different from Listed Stocks?

If you are thinking – what is the difference between an IPO and a listed stock? – the answer is right here.

What is an IPO?

With an IPO, new shares of the company are created and are underwritten by middlemen or an intermediary, you’ll find some of the upcoming IPO in India below. The underwriter works in close association with the company throughout the IPO process, and it includes deciding the initial offer price of the shares, assisting with the regulatory needs, buying shares that are available shares from the company, and selling them to investors through their distribution networks.

What are Directly Listed Stocks?

Companies that want to go public may not have the funds to pay underwriters, may not want to dilute existing shares by issuing new ones, or may wish to avoid lockup agreements. Companies having these problems frequently choose to go through the direct listing route rather than an IPO.

What are the Major Differences Between them?

Here are some of the most prominent differences that you might want to know.

– With both these options, a direct listing, and an IPO – the motive leads to the public market.

– With an IPO, involves creating new shares that are underwritten with the aid of investment banks. Some companies choose direct listings in direct listings when they want to undergo a public listing yet they don’t have the resources to pay for the underwriters.

– An IPO process, the underwriter operates entirely with the said company and determines the initial public offering of the shares that will go through regulatory needs. The companies that don’t want to dilute their shares opt for direct listing.

– In an IPO, the underwriter will buy the company shares and help investors through the process. On the other hand In a direct listing, the current investors, employees, and others holding shares sell them directly to the public.

– In the case of an IPO, there is a guarantee for the sale of shares, but that is not the case for direct listings.

– The IPO procedure involves a lock-in period, which is when the shareholders are restricted to selling their share of the company, and it is used because it helps to prevent the substantial supply available in the market, which decreases the value of the stocks. With a direct listing, the shareholder can sell as soon as the company goes public.

Here are some of the upcoming IPOs In India, and find the ones you want to start investing in.

Upcoming IPOs in India 2022

Here is a list of companies of some of the IPOs in the year 2022.

1. LIC

The life insurance corporation of India is amongst the most-awaited and largest IPOs of India. The government also plans to sell about 5% to 10% of its stake in the organization.

2. Adani Wilmar

Adani is a joint venture with Adani Group and Wilmar Group. In fact, the IPO is a totally fresh share offer. The fast-moving consumer goods company intends on raising Rs. 4,500 crores in the market.

3. Swiggy

Swiggy is a leading online food delivery platform, and the company plans on going public in 2022. The company is concentrating on developing the instant delivery platform and it plans to IPO before 2022.

4. NSE

The National Stock Exchange – India’s largest stock market is planning to go public in the year 2022. Through the share sale, NSE hopes to raise Rs.10,000 crore.

5. Go Airlines

This is an Ultra Low-Cost Carrier airline with a market share of about 10.8%, and it makes India’s fastest-growing carrier. Even, the IPO has a fresh issue of equity shares with up to Rs.3,600.

6. Byju’s

This is a leading EdTech company that offers online education to students. It intends to raise Rs 4,500 crore through the IPO.

7. Ola

Ola is a cab-hailing service, and it operates similarly to Uber. The company looks forward to raising Rs. 15,000 crore.

8. OYO

It is a leading hospitality company, and it aims at raising Rs. 8,430 crore with IPO.

9. Fincare Small Finance Bank

Fincare SFB is a ‘digital-first’ Small Finance Bank (SFB) that primarily serves unbanked and underbanked individuals in rural and semi-urban areas. It entails a new offering of equity shares worth up to Rs. 330 crore and a sale of Rs. 1000 crore.

10. MobiKwik

MobiKwik is one of India’s top suppliers of Buy Now Pay Later (BNPL) and mobile wallets. The digital payment firm seeks to address the credit needs of the online population’s ever-increasing population. Moreover, the first public offering (IPO) of MobiKwik will be worth Rs. 19,00 crore. It entails a new share offering of up to Rs. 1,500 crores and a sale of up to Rs. 400 crores.

Why Should You Invest in an IPO?

There are several reasons why you need to invest in an IPO.

  1. Gives smaller investors a fair chance of investment.
  2. It has stringent norms to protect the investor.
  3. It has greater transparency.
  4. The money is debited from your account only after the shares have been allocated.


When you know everything on the table, it is easier for you to know what you actually need. Here we spoke about the distinctions between an IPO and a Direct listing, along with some of the top IPOs, and you can decide where you want to invest your money.

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