It’s raining IPOs! Even as Indian stock markets hit new highs this year, there has been a slew of Initial Public Offerings (IPOs). This week saw Signature Global, Sai Silks Kalamandir among others and there are several more lined up in the coming weeks.
So as a retail investor what should your strategy be? If you are planning to invest in any of the upcoming IPOs, then it’s important to be aware of the top 4-5 things you need to check before putting your money in a company. In this week’s episode of TOI Wallet, Siddhartha Khemka, Head of Retail Research, Broking & Distribution, at Motilal Oswal Financial Services (MOFSL) simplifies this for you.
Many IPOs hit Indian stock markets: Should you invest? FAQs Answered | IPO Investment Guide
Watch the video above to know what’s driving the market sentiment for so many IPOs to come up and whether investment in IPOs necessarily means getting a good bargain price. Find out the checklist you should follow before investing in any IPO.
Understanding the Business
“The first and foremost thing is what business is the company into and should I be looking at investing in that business? A lot of times we have some of the sunrise industries which come up as a newer space within the listed entities,” Khemka notes, giving the example of the insurance industry. Khemka adds that it is important to study a sector and company’s peers, whether listed or unlisted, to gauge a better idea of a company’s potential.
Financial Analysis
“In the investing world, it is very important to see how good or bad the financials are. If it is in a space which has a lot of listed peers, we can compare it with other listed peers in terms of growth, in terms of margins, in terms of profitability, in terms of cash flows, in terms of return ratio,” Khemka tells TOI.
Watch this week’s TOI Wallet Talks episode above to also understand whether IPO financing is the way to go and where the Indian markets are headed in the coming months.
- Indian stock markets are witnessing a surge in IPOs.
- Investors should be aware of key factors before investing in IPOs.
- Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, provides insights on IPO investing.
- Understanding the business and analyzing financials are crucial before investing in an IPO.
- Watch the TOI Wallet Talks episode for more information on IPO investing.
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