Companies raise capital on the capital markets through an IPO. The capital raised could be utilized for various business needs such as capacity expansion, product diversification, entry into a new region, significant R&D initiatives, merger and acquisition activities, etc. Disclosure of the planned use of the funds must be mentioned in the issue prospectus. The advantage for a company to raise capital through an IPO over other traditional financing channels such as debt is public visibility and the ability to improve market capitalization. The layperson is given the opportunity to buy shares and holds a small share of the company’s ownership. From a valuation perspective, it therefore makes sense for companies to opt for the stock market listing route.