Bangalore: IPOs stands for Initial Public Offerings. Though it sounds complicated, but it is not that hard to understand. Let’s start with its basic meaning - whenever any private company offers its shares to the general public to buy its stock and invest in the company, then we say the company went for IPO. Through this process a private limited company transforms into a public company. All this it happens before the company gets listing in a stock market i.e. the Bombay stock exchange or national stock exchange of India.

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But before you decide upon investing in any company’s IPOs, there are several factors you must take into accounts. In the point below, Ramalingam K, an MBA (Finance) and Certified Financial Planner, who is also the Founder and Director of Holistic Investment Planners, has explained the concept of investing in IPO, on behalf of Rediff.com. You must read it to get a better understanding about these factors:

1. One of the prudent ways to judge a company’s future performance is to look into its past performance. This will give you a rough idea about how well the company will perform in the market during the upcoming years and what return you can expect from your investment? This is important to know because both the company performance and the return on your investment are interlinked. If company function good, you can expect a high gain, but if the company performs relatively bad, you would suffer a painful loss.

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