The following are a few advantages and disadvantages to the listing company when they go for an IPO issue.

Advantages of the IPO Listing:

You can pool in funds to improve equity invest in diverse aspects and enlarge the business activities.

Your obtained capital from public funding keeps you alert in spending carefully on project layouts.

Your IPO projections can increase exposure, and amend your public image. In addition, you can invest in skilled resources enable stronger management, and encourage liquid equity participation.

You can make acquisitions in exchange for your company’s shares of stock.

Your acquired capital through IPO listing can be put to financing opportunities such as equity, convertible debt, gain cheap bank loans on credibility, etc.

The taxation laws permit you to seek tax receivable agreements and the benefit is extended when you are on record as a pre-IPO owner.

Disadvantages of the IPO Listing:

Your business activities will be under legal scrutiny, and accounting and marketing costs shall be reviewed by SEBI.

You will have to make a financial disclosure of your business activities.

Your management will have to contribute a reasonable time to the ongoing business activities, and effort, and be attentive.

When executing risky business operations, exclusive funding shall not be allowed.

Certain business issues that are kept confidential will become public dissemination thus sensitizing your business operations.

With the inclusion of newer shareholders, there is a likelihood of losing control of the management issues.

On making your company go public, there can be an increase in the risk of litigation. In addition, it can create private securities class actions, along with shareholder derivative actions.