1. Company decides to go public
A private company decides it wants to raise money from investors.
2. It creates/offers shares
For example, suppose the company offers 100 million shares at ₦10 each.
If all shares are sold, the company raises:
100m × ₦10 = ₦1 billion
3. Investors apply for shares
You apply through the approved channels, usually through a stockbroker or other designated receiving agent.
4. Shares are allocated
If demand is greater than the number of shares available, you may receive fewer shares than you requested.
5. The company becomes publicly listed
After the IPO, the shares can trade on a stock exchange, such as the Nigerian Exchange (NGX).
6. The share price can then move
If you bought at ₦10, it could later trade at ₦15, ₦8, ₦20, etc.
For example:
Buy 1,000 shares × ₦10 = ₦10,000
Later price = ₦15
Your shares are worth ₦15,000
Unrealized gain = ₦5,000
But the price can also fall, so an IPO is not guaranteed profit.
IPO vs buying an existing stock
IPO: You buy when the company is first offered to public investors.
Existing stock: You buy shares from other investors after the company is already listed.
One important point: you don’t necessarily need a huge amount of money to participate, but the minimum application, eligibility, pricing and allocation rules depend on the particular Nigerian IPO.