Last updated on May 1st, 2024 at 03:45 pm
If you are planning to buy an IPO, Here are 8 Things To Check Before Applying An IPO. These tips will ensure more profit for you.
This is the time of startups, You can expect 1000s of startups in upcoming day and many will convert into IPO. So you can see many IPOs in upcoming days.
Related – Is It Good To Buy IPO On First Day?
What Is IPO?
IPO stands for initial public offering. IPO is a process to convert their company from Private to public. The Company invites retail investor and other investors to invest in their IPO, So they can list in the stock market.
We have a good knowledge of investing in IPO’s and we are sharing these tips that you should check before Applying for an IPO
1. Purpose Of IPO
Don’t invest blindly in IPOs, You must check the purpose of IPO. Why company wants to list in stock market? What is the purpose of IPO? What they want to achieve with the IPO? This will help you to hold your stock for long time.
2. Company Competition
You should know the competitor of the company, Before applying in their IPO. If any company have low or no competitor, they can grow very fast. This can double your money in a short time. Now everything is available on Internet.
3. IPO Documents
Every company submits their documents to the SEBI Or Stock Head Controller for IPO. Documents are fulfilled with every information that you want for analysis. IPO documents are available on Internet or company website.
4. Financials
Company financial or act like real picture. Anybody can predict company growth by looking at their financials. You should check the last 3 years financial of the company. Mostly, new age startups are in debt.
5. Business Model
If you are a long-term player, understanding the business model of the company is very beneficial for you. By understanding their business model, You can decide to invest or not invest in their company. You can also predict their growth by understanding the company’s business strategies.
6. Company Team
Who is the company owner? Who are managing management? You should know them. An experienced and smart team can lead a company to the moon. Information about company team members are available in IPO documents.
7. Real Valuation
Many companies want to trap you in their fake valuation. Mostly companies are looking for their own profits, not yours. So you should know their real valuation. Don’t get caught in their fake valuation game.
8. GMP Of IPO
GMP stands for Grey market premium. If anybody wants good listing, They can check IPO GMP. Grey market premium are available on many websites on internet. Simply type XYZ IPO GMP in Google and get results.
So these are the 8 Things To Check Before Applying An IPO.