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An initial public offering or IPO is the procedure in which a company goes from a private to a public company, selling shares in their organisation and listing on a stock exchange.

An IPO allows a company to raise new capital to fund expansion or improve its infrastructure by selling shares in the company.

Examples of IPOs are the privatisation of Royal Mail and TSB listing on the stock exchange following a carve-out from its former parent company Lloyds Banking Group.

Some companies allow retail investors to buy into their IPO, although many shun retail investors and offer shares in their company to larger institutional investors.