Should you Apply for Every IPO? IPOs are appealing to inves | Credclub

Should you Apply for Every IPO?

IPOs are appealing to investors as they can profit from the potential of increased success of such companies in the future.

Don’t jump the gun –

Rather than investing in every IPO listed on stock exchanges, pause to consider the following.
1. Overvaluation brought on by promoters generating hype about the IPOs.
2. Discounted stock is a strong possibility when the IPO is finally listed on exchanges as a result of waning interest by the public.
3. Limited information pertaining to the company can prove to be an added risk as the company may end up concealing its negative attributes.

We recommend:

1. Read the company prospectus to understand its business model and the industry it operates within.
2. Consider individual investment priorities and gauge risk appetite, funds allocated towards the investment and financial goals.

IPO Trends:

India has over a dozen IPOs yet to be released this year indicative of their growing popularity. Thus far, 22 IPOs worth $2.6bn have already been released in the first quarter of this year amounting to almost double the IPOs listed this time last year.