Understanding DPO vs IPO

A Direct Public Offering (DPO) is a process where a company raises money by offering its shares directly to the public, without using intermediaries like investment banks.

Instead of going through an underwriter (like in an IPO), the company connects with investors via online platforms, social media, or direct marketing.

Key points about DPOs:

• Lower cost compared to IPOs (no hefty underwriting fees).
• Greater control for the company over the fundraising process.
• Best suited for small to mid-sized companies or startups looking to raise capital without listing on a major stock exchange.

What is IPO (Initial Public Offering)?

An IPO is when a private company issues shares to the public for the first time through a regulated stock exchange like NSE or BSE in India.

Key features of IPOs:

• Requires underwriters (investment banks) to manage the process.
• Involves strict SEBI regulations and compliance.
• Provides liquidity to investors since shares get listed and can be traded.

DPO vs IPO: What’s the Difference?

Factor	DPO (Direct Public Offering)	IPO (Initial Public Offering)
Intermediaries	No underwriters, done directly	Managed by investment banks & underwriters
Cost	Lower (no underwriting fees)	Higher (fees, compliance, roadshows, etc.)
Regulations	Fewer regulations (depends on market)	Strict SEBI guidelines in India
Investor Access	Limited (small investor pool)	Broader access through stock exchanges
Liquidity	Limited, as shares may not be listed	High, since shares are listed & tradable
Best For	Startups, SMEs, community-focused companies	Large, established companies

Which is Better for Investors?

• IPO: Safer for investors because shares are listed, regulated, and liquid.
• DPO: Higher risk since shares are not always listed, but offers opportunities to support smaller companies and possibly benefit early.

JM Financial Services: Your Partner in IPO Investments

In India, IPOs are the most common way for companies to raise public capital. If you want to participate in IPOs, JM Financial Services offers:

• A seamless IPO application process through the JM Pro platform.
• Access to research, insights, and company analysis before you invest.
• Hassle-free account opening and guided support.

With expert-backed advice from JM Financial Services, you can make confident decisions while applying for IPOs.

FAQs :-

Q1. Is DPO available in India?
DPOs are not common in India as IPOs dominate the fundraising ecosystem. However, globally, they are used by smaller companies.

Q2. Is DPO safer than IPO?
No. IPOs are regulated and listed on exchanges, making them safer. DPOs come with higher risks due to limited liquidity and less regulation.

Q3. Why do companies choose DPO over IPO?
To save costs, avoid intermediaries, and directly connect with investors.

Q4. Can retail investors participate in DPOs?
Yes, but access is limited compared to IPOs, and liquidity is a concern.

Q5. How can JM Financial Services help with IPOs?
JM Financial Services provides expert research, digital tools, and an easy process to apply and track IPOs.