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› › › › › › › Looking for an IPO? Don't ignore this crucial information!
Looking for an IPO? Don't ignore this crucial information!

Looking for an IPO? Don't ignore this crucial information!

By Wednesday, 1 June 2022

 Hello guys,

In today's post, we will discuss - What is an IPO? What does it stand for? What are the kinds of IPO? What important role does it play in the share market? and many more. It is a very important topic to be discussed while talking about the share market. In this amazing post, we will ask ourselves - Can we invest in an IPO or is it safe to invest if we can?

So let's look into the information we have about an IPO.


Must Read: Digital Marketing Can Give You Tons Of Cash. Here's How!

  • IPO: 
IPO stands for Initial Public Offering. When a company is eligible to be listed in the share market, it can launch its IPO and disburse some percentage of its shares to be bought by people. After doing that the company is completely listed in the Share Market and is freely tradable by any person. Before listing in the share market you need to require permission from SEBI.

Before launching IPO, the company has to pass a lot of paperwork. The company has to make decisions by meeting with board members, investors and stakeholders, after their agreement the process for IPO is initiated for launch.


Types of IPOs:

  • Fixed Price IPO:- In this type of IPO, the company announces a fixed price for the initial sale of shares and after listing, the stock is traded at that fixed price. This is fixed by the company along with the underwriters. In this type of IPO, you need to pay 100% of the amount at the time of bidding. 

  • Book Building Offering:- In this type of IPO, there is no fixed price for the sale of shares but there is a price band with upper and lower prices. You don't need to pay 100% of the amount. You can pay some amount after the allocation. 


Advantages and Disadvantages of IPOs:


Advantages of IPO:

  1. The company gets access to take investments from the public in exchange for shares with an easy process.
  2. It improves the company's prestige and image in public. 
  3. It increases company's sales and profit.
  4.  Company's conditions become more favourable to get more credit.

Disadvantages of IPO:
  1. IPOs are expensive and need more money for maintenance. 
  2. Fluctuation in share price becomes a distraction for the management. 
  3. The company is required to expose its financial details, accounting, tax records and other business details. 
  4. Need to reveal some business secrets which can help competitors. 

Investing in an IPO:

If you are thinking to invest in IPOs then you must need to check out the details of their MD, CEO, Board of Directors and other persons who are involved in running the company of that particular IPO. And in financial observation, you must check the company's performance over the last 4-5 years. Also, check its yearly and quarterly reports. The most important thing you should look for it is that - Is the company have any debt, if yes, know the reason then and if the company had given instalments at the given time or not. Then if all these aspects are looking good to you then you can invest in that company's IPO otherwise you mustn't go for it.




If you have no prior experience in investing your money in the right place or if you don't know how to build your Trading Empire then you must look for our amazing posts every day. Or if you are a professional investor then you will have an opportunity to look over many more ideas to invest in.


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