How do we list out the number of shares outstanding before going for an IPO ?



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3 Answer(s)


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Before an IPO, the company will have an internal capitalization structure which determines how many shares are already owned by the promoters, employees, investors etc.

For example a cap structure will look like this

Founder 1 - 500 shares
Founder 2 - 400 shares
Investors - 50 shares
Employees - 50 shares
So total outstanding shares is 1,000 shares.

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In an IPO the shares issues could be 1) From the existing shareholders 2)New shares being issued. So totally outstanding shares in an IPO will be the 1,000 + new shares being issued.

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Before IPO, they categorized the share for proprietors

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