What does a company do in an initial public offering (IPO)?

In an initial public offering (IPO), a company offers its shares to the public for the first time, transitioning from a private entity to a publicly traded one. This process involves assessing the company's value, setting a share price, and filing necessary documents with regulatory authorities. The funds raised from the sale of shares are typically used for business expansion, debt reduction, or other corporate purposes. Additionally, an IPO provides liquidity for early investors and can enhance the company’s visibility and credibility in the market.