Do not do these five mistakes while investing money in IPO
India’s IPO market has seen a lot of beauty recently. Companies raised Rs 1.2 lakh crore through IPO’s in the year 2021. This is more than the total capital collected during 2018-20. During 2018-20, companies raised 73 thousand rupees through initial public offers. In the IPO market, all kinds of investors, especially retail investors, show much more interest.
New people are applying for IPO.
Experienced investors, as well as many new investors, are subscribing to IPO. The number of investors doing this is very high. Due to increasing digitization and transformation in the fintech region, this growth has gained a lot of speed.
Good market information is important.
If you also want to apply for IPO, keep in mind that good information about the market is the most important thing. Like any other financial instrument, it is important to look at the market conditions and decide with the correct information to get sustainable returns through IPOS. If you also want to invest in IPO’s, then you should keep these things in mind:
1. Avoid the mistake of applying for an IPO without doing basic research: Brother of your neighbourhood, do not subscribe to any IPO at the behest of any senior officials. This can cause great loss to you. Before investing in an IPO, it is most important to mark good IPOS. It would be best to do intensive research about the company before putting money in IPO.
2. Avoid the mistake of investing without business model information: If you do not know a company’s business model, you should not invest in that IPO. Only a company with strong business models is successful.
3. Do not ignore the valuation of the IPO: The valuation of any IPO is one of the most important parameters. Discounting cash flow and stock market trends should not ignore earlier financials
4. Avoid the mistake of making big bets at the time of the decline: New investors should keep in mind that you should avoid investing in the market at the time of decline. If there is a steady decline in the market and experts repeatedly say that more correction will be seen in the market, we should avoid investing in IPO.
5. The mistake of sales on the day of listing: Generally sells the shares allotted in the IPO on the day of listing because investors are often getting good profits on the listing. However, it is to be noted that there is a correction in prices on the day of listing. In such a situation, one or two days should wait for two days instead of the sale.