An IPO is a great way to get funding, as there is no liability to either return the money or pay interest on it. With an IPO, businesses can achieve better competencies against rivals. Funds generated through an IPO can be used for various purposes such as business expansion, buying fixed assets such as land, building, etc., acquiring other companies, fund capital expenditure, and hire new employees. An IPO can also help businesses to reduce their overall debt.
From investor’s perspective, IPOs can be a great way to book profits in a short period of time. That’s why IPOs of popular companies are oversubscribed several times over. To better understand the significance of IPOs, here’s a quick look at some of the world’s largest IPOs of all time.
Visa – World’s leading financial services company, Visa primarily focuses on electronic funds transfers. Several banks and other financial companies use Visa branded debit, credit and prepaid cards to enable both domestic and international transactions. Much of the company’s revenues are generated through payment processing fees. Visa had launched its IPO in 2008, which is a bit surprising as it was the time of global financial crisis. Nonetheless, Visa IPO was a huge success with $17.4 billion capital raised.
NTT Mobile Communication Network – Tokyo‑based telecommunications company, NTT DoCoMo had gone public in October 1998. It was just after the Asian financial crisis of 1997. When the IPO was launched, NTT had close to 57% share in Japan’s mobile market. The company’s IPO was a hit and funds totaling $18.1 billion were received.
SoftBank – Tokyo-based SoftBank focuses primarily on investment management. Although it is named as such, it is not actually a bank. The company was founded in 1986 and provides funds to businesses in energy, financial and technology domains. SoftBank had launched its IPO in December 2018, wherein funds worth $21.3 billion were generated.
Alibaba – Headquartered in Hangzhou, China, Alibaba is a multinational company focused on e-commerce, internet, technology and retail. It is ranked among the top 10 most valuable companies in the world. It operates successful subsidiaries such as AliExpress, Freshippo and Youku. The company had launched its IPO in September 2014, raising funds worth $25 billion. This had made it the largest IPO ever at that time.
Saudi Aramco – Headquartered in Dhahran, Saudi Arabia, Saudi Aramco is one of the world’s largest petroleum and natural gas company. In December 2019, the company raised $25.6 billion via an IPO. This broke Alibaba’s record and remains to be the world’s largest IPO of all time. The company had later sold some more shares, taking total funds raised to a staggering $29.4 billion. The company’s stocks are listed only at Saudi Stock Exchange and not at any of the global stock exchanges.