Listing the different IPO coming up in 2020 is easy, but what makes IPO so special, especially after the COVID-19 situation all around the world is the million-dollar question. Initial Public Offerings (IPO) and Follow On Public Offerings have been recently raining cats and dogs in all the markets around the world in 2020. Let us see why IPO / FPO could be a better investment opportunity for you rather than investing in the existing equities.
Why IPO / FPO ?
The first question anyone would have is why IPO or FPO and why not the existing shares which are already being trading in the market?
The answer is simple. We must first understand why a company will go for an IPO or FPO. Companies go with an IPO or an FPO when they require additional long-term funds for their business. This is similar to taking a loan from a bank except IPO and FPO are investments from the general public rather than a bank and bears no interest obligation as in the case of a bank loan. An IPO / FPO is nothing but equity floated by the company from the public.
Expected returns from an IPO / FPO
Realistically talking, IPO and FPO can give returns ranging anywhere from 10-200% within a few days or even at the day the security gets listed. It all depends upon how many times the offer is subscribed. (Clearly, there are also chances of price to fall). For making it simple to understand, let us dive into the concept of demand and supply. Higher the demand for subscribing to the offer, higher the chances of the security could get listed at a higher price. So for an investor looking to invest in an IPO or FPO, higher the number of times the offer is subscribed, better it is since it leads to the possibility of wealth creation.
How to Invest in an IPO / FPO?
With the new age advancements, investing in IPOs and FPOs have become easier. Earlier to do so, a written application was submitted by the investors for participating in the same.
Now, all one needs to have in order to participate is :
- A Demat Account
- Sufficient funds to apply for the lots
- A bank account
One can simply either using their trading account or their bank account (net banking) apply for an IPO / FPO sitting at the comfort of their home.
Upcoming IPOs in India in 2020
In the past few weeks, two IPOs have shown tremendous interest from the investors. The first one being Happiest Minds which was subscribed 151 times by the retail investors and the second one being Route Mobile which was subscribed almost 28 times by the retail investors. Clearly India seems to be a favourable ground for investors, especially when it comes to new listings.
Few upcoming IPOs in India are as follows :
- Advait Infratech
- SecMark Consultancy
- Computer Age Management Services (CAMS)
- UTI Asset Management
- Burger King
- ESAF Small Finance Bank
and many more….
One can easily look at the publically available information of the company that is planning to bring in their IPO and further take up the decision whether or not investing in the IPO would be a good choice.
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Disclaimer: Views expressed on MoneySymphony.com are just an expression of thoughts. To no extend we are or should be held liable for any losses or conflicts. MoneySymphony.com suggest users take advise from certified experts before taking any actions or investment decisions. User actions may carry risk. All decisions remain the sole responsibility of the individual only.
IPO usually means initial public offering but for this article it means informative post offering 😎😎
Surely!