With reference to Initial Public Offering (IPO), consider the following statements:1.Public Sector Undertakings (PSUs) can also issue their IPOs.2.Pension funds are not allowed to invest in an IPO.Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A

Notes:

Statement 1 is correct: An IPO or initial public offering is the process by which a privately held company, or a company owned by the government such as LIC, raises funds by offering shares to the public or to new investors. Following the IPO, the company is listed on the stock exchange.
Statement 2 is incorrect: There are various categories of investors who can invest in an IPO. For instance: Qualified institutional buyers (QIBs) is a category of investors that includes foreign portfolio investors (FPIs), mutual funds, commercial banks, insurance companies, pension funds, etc.

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