How do existing shareholders benefit from an IPO?

Existing shareholders benefit from an IPO mainly through increased share value and improved liquidity. When the company lists at a strong valuation, the value of their existing shares generally rises, creating immediate wealth appreciation. Listing also enables shareholders to sell their shares in the open market after any applicable lock-in period. In many cases, promoters or early investors may partially exit during the Offer for Sale (OFS) to realize gains.