Often known as a float, this is when the company first offers its shares for trading on the ASX.

An official prospectus is published to allow prospective investors to gauge whether they wish to invest. You can fill in a form in the prospectus to apply for the initial share offering. Remember, under the Corporations Law a prospectus must contain all the information that is reasonably required to allow you to make an informed investment decision about the company. Importantly, it must also disclose any risks that accompany an investment. It should also discuss assumptions on which profit forecasts are made.

Usually shares in a float are restricted, often to people who have some relationship with the underwriter, the institution that takes a commission for managing the IPO. They also guarantee to purchase any unsold shares.