What is an IPO?
An IPO (initial public offering) occurs when a company sells shares to the public and then applies to have the shares listed for trading on a stock market such as the ASX. The IPO Prospectus is a document which contains all the information investors need to know about the company; what it does, how it will make money, who’s involved, the risks of making an investment and how to purchase shares.
- ABC Company wants to offer 15,000,000 new shares at a price of 20 cents per share to raise $3m.
- The company issues a prospectus to inform potential investors about their company.
- Investors can apply to buy shares using the application form in the prospectus, or by contacting their stockbroker.
- The ASX ensures all the listing rules required to be admitted to trade on the stock exchange are met.
- Once the company raises their target amount of funds, and meets all the listing rules requirements, shares in the company can be bought and sold on the ASX and trading begins.
Where can I find out about upcoming floats and IPOs?
The website www.upcomingfloats.com.au is a great place to keep track of new ASX IPOs. Here you will find a table listing all the companies planning to list on the ASX, as well as information on closing dates, how much they are raising and links to each company’s website and prospectus.
How can I sell shares I bought in an IPO?
Shares bought through an IPO application form in the prospectus either end up on a HIN (in a share trading account with a broker) or on an SRN (held with the company’s share registry). Once you have the SRN or HIN, simply contact the Sell My Shares team who can assist with the sale of your IPO shares.
For more information on finding your SRN or HIN, click here.