Top 5 Tips Before Investing in IPO

By : 5paisa, 18 July 2024

1. Research the Company

[{"selector":"#anim-0b2748aa-9e21-4853-8c0d-6ddd54eb21cd","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ab438967-8eb7-43a1-9aa8-c2a35ce9fca6","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f2703dbb-941c-48a0-81fe-7a0cc198b1cb","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0bea7a5c-48c8-4722-a283-6b5fd7b67612","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-2e7794b4-d572-4677-8588-06a1f22cc98e","keyframes":{"transform":["translate3d(0px, -192.64789%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f68b72a3-9c7d-4cb7-8798-b5a03b9fa8f9 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Before investing, conduct extensive study on the company's business strategy, financial health, management team, and future prospects.

2. Understand the Valuation

[{"selector":"#anim-0383ab3b-13f8-47e0-93f5-e2162bfd2920 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-16e88a3e-7bf1-4f71-a9b1-f75dc7664434","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ed7c5aac-aadc-447f-8d8f-9f681e7d128a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ae6708ee-12f7-4919-8b29-becd75905198","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a1938fd4-a0c0-4c1d-8b42-c97fccac37b9","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ecfbaff7-4065-45ea-82c2-7162c2a6d1b1","keyframes":{"transform":["translate3d(0px, -192.64789%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Assess if the IPO is priced appropriately in comparison to its industry peers. Overpriced IPOs may not generate satisfactory returns.

3. Market Conditions

[{"selector":"#anim-c0c13ce0-6751-40a0-ba48-7abeb145f3e7 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-293bf90d-db27-4bb9-8672-530c8d58176a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d9f9c044-99d5-437d-80a8-bfcb9408d7ca","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-88a0ef45-e57a-4efc-bc96-bfc2f0e31597","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-931c564a-03af-480b-9da5-2e80bc21265d","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-359e8654-91f8-47e7-b290-ae2c5c63de3d","keyframes":{"transform":["translate3d(0px, -181.31975%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Assess current market circumstances and mood. IPOs that are launched amid favorable market conditions often perform better.

4. Review the Promoter Background

[{"selector":"#anim-e8bab69b-c388-4a67-ae48-105d6b9cb161 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-9fc455f8-8b7a-4872-b92d-e1e9e2abfba6","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e96002ad-4ad4-46c2-84cb-52f57aa7a994","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b6787219-82fc-47de-8f36-b2313a265a3a","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5c7f1ccd-da21-44fc-b9af-09ced4a6baad","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c3a8a1cd-1b6a-4c59-b552-ce53a7516b6c","keyframes":{"transform":["translate3d(0px, -230.22534%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Promoters with a track record of strong governance and profitable businesses are more likely to lead successful IPOs. Check out IPO

[{"selector":"#anim-924beb33-5871-4b0a-b075-d04a7d117f8e","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-9b498ea8-d151-4a6e-b16f-e7a5c43912fd","keyframes":{"transform":["translate3d(0px, 765.93807%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-21af80d0-f189-447f-9c0e-02e0ccdff8a1","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bae35c97-d2eb-413d-8a71-9eb64a311422","keyframes":{"transform":["translate3d(0px, -571.63723%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Open Free Demat Account in just 5 Minutes! Start Investing Today Open Demat Account

5. Check the Anchor Investors

[{"selector":"#anim-c7193a5c-5f61-4f13-9622-02dd33a9a2a4 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-d8c5a206-1cda-497c-89b6-2cbb52f1f5f5","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b19f4bf5-1b8f-4a47-8802-d39299ac8d30","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1c17468f-02f2-4f65-b024-347f925150e1","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-35f82d58-410a-4e37-a4d3-07833fa05333","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-94341274-b074-4d04-aaf7-08c8c3d78a9b","keyframes":{"transform":["translate3d(0px, -230.22534%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Strong interest from renowned institutional investors might be a good indicator.

Disclaimer

[{"selector":"#anim-83eb1d9a-3a31-4509-8da0-fdd0f925ed92","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-08249fea-5279-4121-868d-e805699e51aa","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1e79db64-8505-495b-b610-59de35c6cdd3","keyframes":{"opacity":[0,1]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-2d872953-9280-4d3b-ac24-bfaeaca793a9","keyframes":{"transform":["translate3d(0px, -179.13436%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":800,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-281e1762-b635-4d63-906a-7945778f2277 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.