The price at which shares are first sold to investors during an Initial Public Offering (IPO) is known as the issue price. This amount is established by the company along with its underwriters, taking into account various factors such as the company's evaluation, current market conditions, and the demand from investors. The issue price plays a vital role since it establishes the starting value of the shares and indicates how much money the company will generate through the IPO. It showcases the company's expected value at that moment and affects how appealing it is to investors.

Conversely, the listing price is the amount at which the shares start trading on the stock exchange following the IPO. This price may vary from the issue price and is affected by the supply and demand within the market on the day of listing. If there is strong interest in the shares, the listing price could be higher than the issue price. However, if interest is weak, it might fall below the issue price. The listing price indicates how the market views the company's value when it first appears on the stock exchange.

For investors, recognizing the distinction between the issue price and the listing price is essential, as it enables them to assess the stock's early performance and make better investment choices. The issue price is determined before shares can be traded, while the listing price is influenced by market conditions as trading commences.