What happens in an initial public offering or an IPO? Well, an IPO is usually a sale of a minority stake, primary or secondary shares. Primary shares involve the sale of brand new shares to the market, where a secondary shares involve the sale of shares that already exist, so existing shareholders can exit. So here we have our group consolidated financials, and it completely includes a subsidiary. What we do in an IPO is we sell off a small chunk of it, that pink slice on screen, that slice is now owned by new shareholders, and they represent a non-controlling interest in the subsidiary because. It's only a minority stake being sold. The rest of the group is still owned by the existing shareholders. Now because only a minority stake was sold, full consolidation occurs as control still remains with the group. That means that that minority stake sale just results in a non-controlling interest in the group accounts. What's happened is that the group has to fully consolidate all of the subsidiary, and then it says, oops, sorry, consolidated too many assets and too many liabilities. Or they have to now recognize the owners of those assets and liabilities. So you recognize the non-controlling interest. Now, an interesting part about an IPO is that as control still remains with the group, no gain or loss is recognized in the income statements. Another interesting thing is that if you are forecasting the group's financials, you have to consider the subsidiaries dividend policy. If the subsidiary is going to pay a dividend, we're now gonna have some of that cash going outside of the group. It'll be going out to those non-controlling interest new shareholders. This can be quite important if you're going to pay a very large extraordinary dividend. You may want to do that before the IPO so that the dividend is paid entirely to the existing shareholders. If you were to pay it post IPO, you'd have some leakage. Some of that dividend would go external to the existing shareholders. It would go to the NCI. In addition, the separate listing provides liquidity for secondary issues and potential m and a. You are now perhaps sitting on a pile of cash that you can use. And lastly, there's the potential for debt pushed down. The group could push some debt down into the subsidiary and the.