IPO Investing

  1. Evaluate an IPO from a long term investment perspective instead of getting very high listing gains
  2. Study the prospectus very closely – about the risk factors and the track record of promoters ( Seeing & reading IPO Advt. is not enough)
  3. Use peer-group valuations as benchmarks (Eg. Industry P/E ratio from Capital Market Magazine ) for pricing. Discount any sudden or abnormal improvement (Eg. By sale of asset, any one time income, etc.,) in the company’s operating performance.
  4. Be prepared to block your funds for about 25 days.
  5. Bid at cut-off price in order to maximize your chances of allotment . ( Read Sunday Business Line (investment world) for recommendations which are usually unbiased and very useful.
    Have a Great Weekend .

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