Factors to consider while investing in IPOs

With the arrival of IPO season, this week will entirely busy in issuing the shares and indulgence in investment.

Before making an investment decision there are several factors to consider making it rewarding in the long run.

A company decides to go public that is to raise funds through IPO, by listing the company on a stock exchange. IPO refers to the initial public offering. It refers to the company that generates capital through the sale of shares to the general public for the first time.

When a company is not public, it is difficult to find the information as it is not easily available. The investment decision is majorly dependent on the figures and profits of the company. For the investors, it is essential to do intricate research and know the performance of the company.

Before rushing to obtain the allotment it is advisable to do the fundamental analysis of the company. It includes the assessment of the financials of the company, competitors, economic state, industry trends, and more. It will give an estimate of the company’s performance in the market.

QIB participation is one of the factors to gauge the company’s performance. However, investors should not solely rely on QIB participation. There is a probability of QIB taking a partial decision favoring the company. Hence investors should be careful and attentive before depending on the QIB subscription.

DRHP may have partial details and tell about the growth aspects and goals of the company. Research and Development, expansion, acquisitions, etc may help the company to earn profits in the future. Hence this is useful to the investors as it will aid in earning profits in the future.

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