The number of IPOs launched in India has significantly increased over the years. Many influential private companies will become public in 2023 by launching their IPOs. Since it’s raining IPOs, investors must keep track of current developments. Let us discuss ways to take advantage of current IPOs in India.
Discussing the Basics of IPO
IPO or Initial Public Offering allows a private company to become a publicly traded company in India. It is usually a multi-day event that involves a company issuing its shares to the public. A company is a private entity when it does not offer its shares to the public. Any company deciding to go public must launch its IPO in India. After the completion of the IPO, the company becomes fully public, and its shares are listed on stock exchanges. Companies can generate capital by liquidating shares in an IPO. Investors can submit their IPO applications and stand a chance for allotment in India. Allotment is the process through which the issuer offers IPO shares to different investors.
Issuers take permission from the Securities and Exchange Board of India (SEBI) to launch an IPO. Investors are notified about the IPO in advance to bring more applications. Besides newly turned public companies, large organisations that went through restructuring or bankruptcy re-enter the public market via IPOs. Two IPO types are available in India are:
- Fixed-Price IPO: The price of shares is predetermined in a fixed-price offering. Investors get to know the exact share price before submitting the IPO application.
- Book-Building IPO: The price of shares is not fixed in a book-building IPO, as there is a price range. Investors place bids within the price range. Towards the end of the IPO, the share price with maximum bids is the official price.
How to Make the Most of Current IPOs?
Here are some tips to make the most of current initial public offerings in India:
Stay Updated
The first step is to know about the current and upcoming IPOs in India. Once an IPO closes, you cannot submit your application. Investors must depend on trading platforms to keep track of upcoming IPOs. Reliable news sources can also help investors find the right IPOs in India.
Have a Brokerage and a Demat Account
If you are new to trading, open brokerage and Demat accounts to invest in IPOs. You can open Demat account online through many stockbrokers or depository participants. After you apply for an IPO, the shares are credited to your Demat account. Besides brokerage and Demat accounts, you also require an investment platform. A trading or investment platform will allow you to browse IPOs and choose the right one.
Apply Within the First Few Days
When you are interested in an IPO, try to apply on the first day itself. You can also submit your IPO application on the second day. Don’t wait for the last day of the IPO to submit your application in India. Technical glitches and other hassles on the last day might prevent you from applying. You must submit the IPO application within the first two days to increase the chance of allotment.
Verify all IPO Details
Your IPO application will be rejected when details like UPI ID, name, PAN, and DOB are inaccurate. Go through your IPO application twice before submitting it. It is crucial to ensure there are no mistakes in your IPO application.
Perform Research
Don’t invest in an initial public offering without proper research and analysis. You can start by analysing the historical performance of the issuer. You must analyse the chances of the issuing company to increase their market cap. Invest in IPOs that will help you with capital appreciation in the future.
Conclusion
IPOs are increasingly gaining hype in India. Different investors, from institutional to retail, invest in IPOs every year. You can also use a reputed investment platform to compare different IPOs and choose the right one. Invest in an IPO and get allotted!
