The full form of IPO is Initial Public Offering. It is a process by which a private company can go public by selling its stocks to the general public. During an IPO, the company sells its shares to retail and institutional investors. Companies hire investment banks to market, gauge demand, set the IPO price and date, and more. IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market. Companies can raise equity capital with the help of an IPO by issuing new shares to the public or the existing shareholders can sell their shares to the public without raising any fresh capital.