Three IPO Investing Advices For A New Investor

BENGALURU: Generally, the first time investors in India make their debuts through investing in IPOs. As the domestic equity markets have been doing well since past few years, the confidence in the primary markets has been increased.

In 2013 the total money raised via three IPOs was around 1,284 crore and in 2014 it was 1199 crore for five IPOs. But 2015 has already witnessed issues hitting the markets in its first three months with a collective amount of 1,660 crore.

However, for retail investors IPOs are secure windows to make investments and enter into the equity environment. But there are certain more things to know about IPO’s before apply or investing for the shares in it. The livemint.com has compiled certain ideas to help you before you jump into IPO investments:

Pricing Constraints: Investing in IPO’s deals pricing which means the price at which the shares of the company can be bought. The pricing is decided based upon many elements which are decided by the investments bankers appointed by the issuing company.

The Investment bankers analyze how worth a company is and then they estimate its valuation comparing with the similar companies in the relevant field. The pricings are said to fairly assign based on the company’s financial health evaluation. Mostly, IPO’s which come during bull markets get excused with high pricings. If the markets go high, then the share prices will also see a significant growth.

Read More: Spicejet To Add 7 Planes; Another Rs 500 Cr Infusion In April

Ahead Of Modi Visit, India Holds 'Make In India' Fortnight In Germany