Initial Public Offerings (IPO) have clearly been a hit with investors in 2019.
Despite the market volatility during the year, which gave many investors sleepless nights, many IPOs issued during the year put up a spectacular performance on listing and beyond.
Of the 13 IPOs listed in the year, 12are currently trading at between 6% to 175% above their issue prices.
Both first time equity investors and veterans have found IPOs to be a simple and convenient way to own a stock.
This route can reduce the stress associated with the timing of the market, which is something that can intimidate new entrants and keep them waiting for a good rate indefinitely.
More interestingly, many have often enjoyed enormous profits when they have sold on listing, making them feel well-rewarded and encouraged.
Best of all, smart research before investing in IPOs of robust stocks, coupled with the patience to hold on to them for a few decades has created immense wealth for many investors.
There are many upcoming IPOs, including the Ujjivan Small Finance Bank issue opening on 2ndDecember, 2019.
While investors look for quick and juicy returns by selling IPOs on listing, there is a chance that they could list at a discount, only to shine later, or never.
So, like with any other equity investment, before you proceed to invest your hard-earned money in an IPO, it is important for you to check if the company is worth it.
A few important tips can help you take a favourable decision-
1. Get your hands on everything about the company; especially its fundamentals, financial position and past track record. Analyze them well on your own or with the help of your broker, so that you get the benefit of an informed decision.
2. Know why the company is going public. What is the objective for raising funds? Is it to repay some loan, to invest into research or to fund its expansion plan? Analyse the end use keeping in mind the company’s unique situation; so, for instance, if the objective is loan repayment, it might mean that your funds may not be utilized for value addition. Then again, repayment of a loan could make all the difference in a company’s financials, going ahead.
3. Even grey market premiums can be a guiding factor on how the company is likely to fare on listing.
After you have evaluated the IPO successfully, it’s time to invest!
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Don’t miss investing in good IPOs. If you would like us to guide you with your choices, we’ll be happy to.
Happy IPO investing, small steps can create big wealth!
We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to blog article hereby solemnly declare & disclose that:
We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in securities of the company. We do not have any directorships or other material relationships with the company. We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.