Greetings friends!
I wish you all a prosperous and pleasant year in 2022.
A new year brings with it a fresh start, new hopes, and new goals.
The topic of discussion today is initial public offerings (IPOs). Many people have requested that I write on initial public offerings (IPOs).
In simple terms, an IPO is when a company offers its shares to the general public for the first time before being listed on a stock exchange, often known as the primary market.
We’ve recently witnessed a slew of IPOs in the market, including both old (Paras Defence, Ami Organics, and so on) and new companies (Paytm, Policy Bazaar, etc).
There are numerous things to consider, including the balance sheet, profit and loss statement, sector, management team, market cap, CAGR, and so on.
It is necessary to have a thorough understanding of the company for which we are seeking for an IPO.
The valuation metrics for the new generation of enterprises, so-called start-ups, are wholly unique and, at times, hard. We must dedicate a significant amount of time to comprehending all of this information and decide whether or not to apply for an IPO.
Another simple thumb rule is to check at the grey market premium (GMP), broker recommendations (8/10), oversubscription on day one, and so on.
You can apply for the IPO by combining all of the above. You would have made a profit on listing eight out of ten times, as well as in the long run. Other broader elements, such as market conditions, geopolitical considerations, government role, and so on, have an impact on market indices and company listings in relation to index performance.
To understand the total risk and strategy for applying for an IPO, it’s always a good idea to engage a financial expert.
In my next blog, I’ll talk about how and where to apply for an IPO, how easy it is to do so, and tactics to employ to gain more allotments, among other things.
Thank you for your time and consideration, and best of luck with your investments in new IPO offerings.
About the Author :
Nitin Bhandari, a passionate & certified research analyst with over 15 years of experience in Equity Markets and founder of Heet Investment, a financial brooking firm in Bengaluru. You can get in touch with him on nitin@heetinvestment.co.in