Why do Companies List on the Stock Exchange?

Why do Companies List on the Stock Exchange?

Initial Public Offerings (IPOs) have taken Indian investors by storm in recent times. Take the year 2021 for instance. As per a report by E&Y, 72 IPOs were launched in India between January and September, which raised a whopping $330.66 billion. Further, 35 IPOs are currently in the pipeline for this year, including Nykaa, Mobikwik, Aditya Birla AMC and the famed LIC.

But why is there an IPO frenzy in the market with start-ups, companies of scale, and many medium-sized enterprises itching to list on the stock exchange?

The answer is simple. IPOs are the way for unlisted or privately traded companies to raise funds from the open market.