5 Tips for Investing in IPOs


Bangalore: Initial Public Offering can be profitable initially but it can be disappointing to investors in the long term. Investment doesn’t always pay back; the investors can’t keep expecting the double and triple gains which they receive in the earlier stage of tech IPO. The investment in IPO has become a long term outlook rather than the quick buck.

So the investors are more inclined in scrutinizing the long term prospects instead of trying to capitalize on the initial swing. Finding a good IPO is difficult even if one wishes to concentrate in the long term benefits. It is different from the average stock as it holds many unique risks. Here are the 5 tips to invest in an IPO if you wish to take the challenge or risk.

Objective research is a scarce commodity

Private companies are not covered by a group of analysts like the public companies and so it’s difficult to find out whether the company is ready to go public or not. Whenever a company discloses its information it’s put up in a manner to attract investors as it is written by the company employees and not by other unbiased group. While seeking for information about the company it’s important to search about the company’s competitors, financing, past press releases and the industry health. To make the wise decision about the investment one must know as much as possible about the company even if the information is provided is little. Sometimes while researching one might come across that the company has just overstated itself and in such a case it’s better not to invest.