What is the main objective of an IPO?

The primary objective of an Initial Public Offering (IPO) is to raise capital from public investors. By offering shares of the company to the public for the first time, a company can significantly enhance its financial resources. This influx of capital can be used for various purposes, such as expanding operations, developing new products, paying down debt, or investing in marketing initiatives.

When a company goes public, it transitions from being privately held to publicly traded, allowing a broader base of investors to buy shares. This process not only helps to generate funds but also provides greater visibility and credibility in the market, which can attract further investment and contribute to the company's growth.

While providing liquidity to existing shareholders is one of the outcomes of an IPO, it is more of a secondary benefit rather than the primary objective. Reducing operational costs and consolidating market share do not directly relate to the purpose of conducting an IPO and are typically focused on ongoing operational strategies rather than initial fundraising through public investors.