How to Select Strong IPO?
The drought of Initial Public Offering (IPO) in the Indian primary market is about to end. In fact, the market sentiments are slowly improving since the lockdown opened in the country. The March low has led to a significant rally in the stock market. In the fourth phase of unlock, almost all services have been started except a few. Now after the fall in the market, now signs of strength are showing.
Liquidity has started increasing in the market. This has increased the enthusiasm of those companies, which were waiting for an IPO for a long time. In the coming days, about 2 registered companies are waiting for the IPO. In the same month, September, six companies are bringing IPOs. Expert says that this is a great earning opportunity for small investors. They can earn big money by investing in IPOs of good companies.
IPO is coming for these companies
Happiest Minds (702 Crore) (opening today)
Route Mobile (600 million)
Angel Broking (600 Crore)
Computer Edge Management Services (1500 Crore)
Chemcon Specialty Chemical (350 crores) 350 crores
Utii MC (3000 Crore)
IRFC (4000 Crore)
Equitas Small Finance Bank (1000 Crore)
Gland Pharma (5000-6000 Crore)
Drought was so far this year
Let us tell you that due to Corona virus this year there was pressure on the economy. This affected the performance of the market. Due to this many companies postponed their IPO. So far this year, only 3 IPOs have come before Happiest Mind. These include the IPO of 10 thousand crore SBI Card and Payment Services in March, Rosari Biotech worth 500 crores in July and the issue of 4500 crore Mindspace Business Park REIT. While in the year 2019, about 15 IOs came. At the same time, there were a total of 24 IPOs in 2018.
Companies are seeing the right opportunity
Jagdish Thakkar, director of Fortune Fiscal, says that the market has gained momentum after the economy opened. Liquidity has arrived. If there is no big negative trigger, then this momentum is expected to continue in the market during the time of unlock. In such a situation, the companies’ trust in the economy is increasing and they see a good opportunity to enter the market. Companies expand their business by raising money from the market through IPOs. For this, they see this perfect opportunity. However, in case of investors, they should invest only in companies with strong business models.
How to choose the right issue
If you are going to invest in an IPO, then first focus on its upper price band. From this, its correct valuation can be estimated. Find the right financial position of any company with EPS. Also, check the price to earnings ratio (P / E). Compare this with those companies which are of the same industry and about the same size. If the P / E ratio is less than the P / E ratio of other companies, then it can be estimated that you can get good returns on the day of listing.
(Discliamer: Investing in the stock market is subject to risk. Before investing in any form, do a thorough investigation. Consult your financial advisor.
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