The process of a company going public by offering shares to the public for the first time is called

• A. Rights issue
• B. Stock market flotation or initial public offering (IPO)
• C. Secondary offering
• D. Buyback

Answer: (B)

An initial public offering (IPO) is the process by which a company goes public by offering shares to the public for the first time. This move lets the company raise capital and provides a route for early investors to realise some value, while giving public investors a chance to buy into the business. The IPO typically involves underwriters, a prospectus that explains the business and risks, regulatory approvals, and pricing that sets the first share price (often with lock-up periods for insiders). This differs from a rights issue, which offers existing shareholders the right to buy more shares; a secondary offering, which is new shares issued by a company that is already listed; and a buyback, where the company buys its own shares back from the market.