While everyone is busy talking about finally getting Zomoto’s IPO allotment or missing it this time, more and more investors are adrenalized for the upcoming IPO’s this year like Paytm, Mobikwik, LIC, Pharmaeasy and many others. 

Before you begin investing, Mr. Sidhavelayutham, CEO and founder of AliceBlue - leading discount brokerage firms, explains to you about IPO and also shares with few important tips to help you make an informed investment decision.

So, Why Do Companies List themselves on the Stock Market?

Initially, most of the companies are private limited companies. Their growth is relatively smaller with fixed capital and a smaller group of shareholders or investors. To grow big and beyond, the company requires bigger capital which calls for more investment. IPO lets the company achieve this by listing themselves on the stock exchange by offering their shares to the public.

In order to make the most out of your investment, you need to do your own part of the research on the company.  With the large size IPO’s, you may be aware of the company name or even may have used its services/ products but to invest in the company, you need to do the background research and check the past records of the company, Analyze the financial data and assess the company’s valuation and along with this, you need to understand the company position among its competitors.

While you can find all the relevant information regarding the business of the company in the Red Herring Prospectus, it can be easily downloaded on SEBI’s website.  It is also advisable to understand the risk involved in the process and also have a clear idea about the investment goal you want to achieve.

“Many companies have adopted an agile approach and have managed to turned this adverse pandemic situation into opportunity. This year has been best for Intial Public Offers (IPO). ” Sidhu added.

IPOs offer you a great opportunity to make a good amount of money in a short span of time. In the month of July itself, three of the Dalal Street debutants have given more than 50% returns on the listing day - Zomato (65.59%), GR Infra (108.7%) & Clean Science (76.13%).

Now, you are empowered with the knowledge, there are tons of big-ticket IPOs coming up this year, don’t miss out on any of them, Open your trading account with Alice Blue Today!