Several IPOs are scheduled to launch in 2024. The main IPO that you should watch is Ola Electric. It is India’s first electric vehicle (EV) startup. The second one is the ECOS India Mobility and Hospitality. The company is involved in providing mobility and hospitality solutions for businesses and leisure travelers. The third IPO is the Premier Energies. It is a renewable energy company that specializes in solar photovoltaic cells and modules manufacturing. The next one is the Indian Phosphate. The company is engaged in the production of phosphate-based fertilizers, which are essential for improving soil fertility and agricultural productivity.
How to Apply For an IPO?
To apply for an initial public offering through your broker, you can follow these instructions:
- Find the IPO tab on your Demat account
- Choose the IPO name you want to invest in from the list.
- Enter the lot size
- Choose the bid price
- Give your UPI ID and click on submit. Complete the translation from your UPI app.
- You must wait for the mandate notification in your UPI app. This will block the application money until the shares are allotted to you.
Factors to Consider Before Investing in an IPO
When you decide to apply for an IPO, there are a few crucial factors that you should check thoroughly. These are:
- Company’s financial health: Check the company’s financial statements and look for profitability, revenue growth, manageable debt, etc.
- Market and industry trends: Check the industry’s growth potential and current market trends. Companies in booming industries generally offer better opportunities.
- Prospectus: The company’s prospectus has all the details about the company like its operations, financials, and risks. Check it thoroughly to understand their business model and challenges.
- Competitive analysis: Compare the company with its competitors. If a company has a competitive edge, your investment could more likely give more returns.
- Valuation check: Ensure the IPO price is reasonable based on financials and comparable market valuations. An overvalued IPO may not deliver the expected returns.
- Lock-up periods: Identify any lock-up periods for insiders. This can impact stock supply and demand post-IPO.
- Underwriter reputation: Research the investment banks or underwriters backing the IPO. Established underwriters increase the offering’s credibility.
- Market sentiment: Monitor overall market sentiment and interest in IPOs. Favorable conditions can enhance IPO performance.
Benefits of Investing in IPOs
Investing in IPOs offers many benefits including:
- With IPOs, you can invest in a company at its early stages before it becomes widely available on the market.
- Successful IPOs can yield significant returns, especially if the company grows rapidly post-listing.
- Investing in IPOs adds new sectors and industries to your portfolio. This strengthens your portfolio diversification.
- Holding shares from an IPOcan lead to substantial long-term gains as the company expands.
FAQs
- Who is eligible to apply for an IPO
To apply for an IPO, you must be at least 18 years old, have a valid PAN card, a demat account, a linked bank account with ASBA, and be either a resident Indian or an NRI. Retail investors can invest up to ₹2 lakh.
- Can I sell my IPO shares immediately?
Yes, you can sell IPO shares on the day they are listed. Once alloted, retail investors can sell their shares anytime on or after the listing date.
- Can a beginner invest in an IPO?
Yes, beginners can invest in an initial public offering, but it’s important to do thorough research and company analysis before investing.
CTA
Discover the latest IPOs for your next big investment here.
………………………………..
The year 2021 can be termed as the most successful year for Indian IPOs as a total of 64 mainboard firms raised an amount of nearly 1.20 lakh crore, which is the highest amount accumulated through Initial Public Offering in one calendar year. In 2022, the Indian stock market saw one of the most talked-about listings – LIC (Life Insurance Corporation of India), which raised $2.7 billion during the launch.