IPO Test 6 - Fresh Issue or Offer for Sale? Take This Quiz to Find Out!

Welcome to your IPO Test 6 - Fresh Issue or Offer for Sale? Take This Quiz to Find Out!

Are you familiar with the Initial Public Offerings (IPOs) process and how companies raise funds from the market? This quiz will test your knowledge on key IPO concepts, including Fresh Issues, Offer for Sale (OFS), shareholder impact, and market conditions. Answer the questions below and see how well you understand IPO investments! 🚀

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1. What is an Initial Public Offering (IPO)?

A method used by companies to buy back their shares from the public

A loan taken by companies from retail investors

A merger between two publicly listed companies

A process where a private company issues shares to the public for the first time

2. In a Fresh Issue IPO, where does the money raised go?

To the selling shareholders

To the company for expansion or debt repayment

To the stock exchange as listing fees

To the government as a tax on new shares

3. What is the main difference between a Fresh Issue and an Offer for Sale (OFS)?

In an OFS, the company raises new capital

A Fresh Issue benefits only early investors

In an OFS, the company gets money for growth

In a Fresh Issue, new shares are issued; in an OFS, existing shares are sold

4. Which of the following statements is true about an Offer for Sale (OFS)?

It results in equity dilution for existing shareholders

The proceeds from the IPO go to the company for expansion

It allows existing shareholders to cash out their investments

It increases the company's total share capital

5. What happens to the ownership percentage of existing shareholders in a Fresh Issue?

It remains the same

It increases as more shares are issued

It gets diluted as new shares are created

It disappears as new investors take over

6. What is a key advantage of an Offer for Sale for investors?

The company receives direct financial benefits

The IPO price is always lower than the market price

It guarantees higher returns compared to a Fresh Issue

There is no dilution of existing shareholders’ ownership

7. Why should investors check the Draft Red Herring Prospectus (DRHP) before investing in an IPO?

It provides financial and business details of the company

It guarantees that the IPO will be successful

It helps investors avoid paying brokerage fees

It reveals the company’s future stock price

8. Which of the following is a disadvantage of an Offer for Sale?

The company does not receive any funds from the IPO

The company’s ownership structure changes significantly

It always results in lower share prices post-listing

Only retail investors are allowed to participate

9. How can market conditions impact the performance of an IPO?

IPOs always perform well regardless of market conditions

Bearish markets ensure higher IPO subscription rates

IPOs tend to do better in bullish markets

Market conditions do not affect IPO performance

10. Which of the following IPOs included both a Fresh Issue and an Offer for Sale?

Reliance Nippon Life Asset Management IPO

Paytm IPO

LIC IPO

Infosys IPO

Congratulations! You've completed IPO Quiz 6! 🎉📊

Thank you for participating! Understanding the differences between Fresh Issues and Offers for Sale (OFS) is essential for making informed IPO investment decisions. By analyzing how funds are raised, ownership impact, and company valuation, you can make smarter investment choices in the stock market.

Feel free to share this quiz with friends and colleagues to help them enhance their IPO knowledge. Keep learning, stay informed, and explore more quizzes to sharpen your financial expertise! 🚀

IPO Test 6 – Fresh Issue or Offer for Sale? Take This Quiz to Find Out!

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