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Questions (FAQs) on
What is an IPO (Initial Public Offer) ?
When a company raises funds for the first time directly from general public for its business expansion or new projects, the act of brining this offer of fund raising is know as Initial Public Offer or IPO. The company seeks people to invest funds that means give money to the company and in return the company gives stocks or shares of the company to the general public.
What are the different types of IPOs (Initial Public Offer) ?
On the basis of the IPO pricing models, there are 2 kinds of IPOs. One is a fixed price issue. Where the price of the IPO is pre-determined. You can apply for the IPO and it gets allotted to you at that rate. Another type of the IPO is a Book Building Issue where you just have a price ranging between which you can bid for your quantity. Based on the weighted average of the bids, the allotment price of the IPO is calculated.
What are various things that I shud know about an IPO ?
Before Investing in an IPO you must gather information around the following:
Company Performance, Sales, Revenue for past 5 years
Draft Prospectus filed with SEBI
IPO Grading by the rating agency
Issue Open & Close Dates
ASBA (Application Supported by Blocked Amount) facility
Online IPO Application facility
Performance of other similar companies in that industry.
How do I make my IPO investing more profitable ?
IPOs are generally known to be giving good returns but it doesn’t mean that you can’t get losses. Initial Public Offers (IPOs) as much as stocks are the risky investments. When you invest in an IPO, you get allotment at a certain price and when the IPO gets listed on the stock exchange, at times you have windfall gains as the listing price is way too higher. There are also instances when you IPO bet turns negative and you are stuck with losses.
How much to expect from an IPO, how long to stay invested whether to sell on listing or carry on even further, all this requires in-depth analysis and expert opinion. Your stock broker or the financial advisor who helps you on your equity portfolio would be able to help you find the desired information on IPOs. The broker or the financial advisor even facilitates your investment process to make IPO investing a seamless experience for you.