who is underwriter what is the role in ipo?

The underwriters are the investment banks selected to manage the process of the IPO.The company doing the IPO selects the underwriters. The underwriters are responsible for: 1) valuing the company to price the IPO, 2) helping to draft the IPO prospectus and marketing materials, 3) finding investors to buy the company's IPO. The underwriters serve as intermediaries between the company selling stock in the IPO and the investors buying stock in the IPO. As such, both parties are the underwriter's clients and the underwriter tries to serve the interests of both. Typically one of the underwriters is designated as "lead manager" by the company. The lead manager takes the primary responsibility for the process described above.

the underwriter (or, more commonly, an underwriting syndicate) is a group of investment banks and other individuals who sell the shares of the company to the public.

underwriters usually are assigned a quota or allotment of shares that they are allowed/expected to sell. if they don't sell their quota, the underwriter itself remains stuck with the excess.

in other words, the underwriter assumes the risk that the stock won't sell as well as expected and that the underwriter will get stuck with the extra worthless shares. on the other hand, the underwriter also gets to reap the benefit if the shares sell well by retaining for itself a spread between the price at which it purchased the shares from the newly public company and the price at which the shares are placed with the public.