what is an IPO and should we apply for an IPO ?

What is an IPO? Should we apply for an IPO? how to apply for an IPO? how to check IPO allotment status? check out the full post for all the answers.

What is an IPO?

IPO stands for initial public offering in which a particular company decides to go public by selling some of their shares to people and in exchange gets the money.

Why companies go public?

When a particular company gets in a good position and has recognition in the country or state they apply for IPO, not every company does this.
If a company is in need of funds they prefer for initial public offering, there are many reasons for a company to raise funds via IPO like filling up debts or increasing their production, building more assets, etc.

Does every company apply for IPO?

No, only the companies who are in need of funds for any reason apply for ipo.
But the reason is not the same in every case, when any startup in the initial stage gets backed by good investors and the particular startup becomes a well-known company, they are financially very strong to grow on their own.
In such cases, there is no need to raise funds from individual investors, but applying for an IPO doesn’t mean that the company is facing any issue so they need people’s help! Once a company goes public it shares are available to trade in the open market I.e the company gets listed in the stock market.
And nowadays people’s expectations towards a particular company has increased. any company the product they are using or they like their ideas etc, they want that company to grow and they can see it growing. And we know where it happens! the stock market is the only place where people see companies’ growth and today the investment craze is so high, that the markets are carried by the bulls, seems all bears are hibernating 😬.

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Should we apply for an IPO?

IPO’s are a great source for making instant money. If you are allotted for a particular IPO then your lucky enough!
Applying for an IPO is not profitable always, the market conditions and sentiments decide the listing gains for an IPO.
If the market conditions are good you can apply for any upcoming IPO’s provided the company is fundamentally strong and has good recognization.

How to apply for an IPO?

Applying for an IPO is really easy today, if you have a Demat account then 2/3 minutes of work to do. We recommend the most used and trusted platform Zerodha to trade and invest in the stock market, you can also apply for an IPO via their platform check out now.

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Which Ipo’s should we Apply and when?

There are many IPO’s upcoming, every month on average more than 5 companies go public and this is the chance retail investors get to make some money.
90% of the IPO’s are profitable whereas 10% are not because of market corrections or crashes. Applying for almost any IPO in the grey market is always profitable.
It is hard to predict whether the particular IPO listing will be in the grey market or not because we really don’t know what is coming. for example, during the Covid-19 outbreak, the SBI card was listed everyone predicted the listing gain will be above 80% but because of lockdown, it was listed at -20%.

 

how to check IPO allotment status?

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After applying for a particular IPO, after 4/5 days there is an allotment day when it is decided who are allotted for the IPO, if the particular companies IPO is oversubscribed the probability of allotment decreases, the more number of people apply is the less probability than you will get allotment for the IPO.
There are many ways to check the IPO allotment status the best way is to check manually via chittorgarh.com and kfintech.com

To check the IPO allotment status you just have to select for which IPO you have applied then enter your pan details or client ID of your Demat account then, enter the application number provided. In this way, you can check your IPO allotment status very easily.

Should we sell the stocks after allotment?

It depends if you have thought the company may perform really well In the future then you should hold the stock for a long term after allotment, if you are looking for a short term profit then its best to exit the stock on the listing day itself.
According to market experts, it is better to book profit on the listing day itself as there are many people who exit on the listing day which may lead to the lower circuit cramp.

Hopefully, all the doubts related to IPO are cleared, if you still have any doubts just comment below.

 

Check out our trending post should we invest in Hindustan Unilever

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Posted by

aniruddha vikharankar
an investor, blogger, astrophile and a web developer .

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