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Apply online and invest in companies listing on the Indian exchanges with an IPO (Initial Public Offering) using mobile UPI with your Findoc account.
An initial public offering is a proposal by the issuing company to the public to buy their stakes. This way, they intend to go public by getting listed on the stock market exchange. The transition from the private to the public company helps them to raise capital and fully realize their investments. A company usually opts for an IPO when it has reached its growth stage and ready to handle its responsibilities towards public shareholders. Some examples of the biggest global IPOs are Alibaba Group in 2014 raising $25 billion, SoftBank Group in 2018 raising $23.5 billion. In terms of Indian IPOs, Coal India’s in 2010 raised Rs. 15475 crores and Reliance Power’s IPO in 2008 raised a total of Rs. 11700 crores.
From the historical performance of the company, investing in the quality of stock at the IPO price level can be lucrative in the long run. For example: in India, there have been many IPOs in which governments sell their stake directly to the public.
The process is strictly monitored by SEBI that works in the interest of retail investors. They compel the companies to follow high standards of disclosure and transparency. Also, the price is mentioned in the IPO order document.
The information provided to the institutional investors is the same as given to the retail investors in the form of company prospectus. This is not true while investing in the secondary market where the big players have an edge over others.
The IPO price can be the lowest price the high-growth company can trade at. This may be the discounted price at which the IPO is issued and if invested it can yield high returns.
The primary reason is to access investment from the general public.
Increases the chances of better credit borrowing with enhanced transparency.
The listed company can again raise capital from the market with FPO or first public offering.
It becomes easier for the company to attain high skilled employees by providing ESOPs in the public company.
Helps the company in advancing its prestige, public image, and exposure which will ultimately help in revenue generation
When the IPO shares are allotted to you, the capital gains are taxed once you sell them. These taxes on the capital gains can be short-term or long-term depending on the time horizon you have kept the IPOs.
While there is no full proof winning strategy, however for an excellent quality stock the listing day gains can raise up to 70% to 80%. You can stay in the stock for a long time investment horizon if you see the potential in the company.
An IPO can be oversubscribed or undersubscribed, depending on the number of subscriptions. It has been generally noted that popular stocks are subscribed to much more than available stocks and many investor fail to get any shares. For example: IPO was subscribed over 112 times, making it the most successful share sale.
Yes, you are allowed to change or revise the price or quantity of the bid simply by filling the modification form. You can also do the same by logging into your trading account. This, however, should be done within the date of closure.
Under Clause 8.8.1, Subscription list for public issues, IPO shall remain open for at least 3 working days and not more than 10 working days.
Issuing an IPO can be done via the process of book building or fixed price or a combination of both. In fixed price, the price at which the securities are allotted or offered is predefined to the investors. While in book building, an indicative price range or band is given to the investor for bidding.
Yes, if an investor is short on the required capital, they can take margin from their broker. Here, the investor only has to pay a small margin amount, and the remaining is funded by the lender.
One can find the IPO prospectus on the SEBI’s website under Filings> Public Issue. Along with this, several other important information documents like Draft Red Herring prospectus, Red Herring Prospectus, and Final offer document can also be found on this website.
You can easily apply for an IPO if you have a trading/demat account through online and offline process. In online mode, you have to log in to your account and enter the number of shares and its cut off the price you want to bid. Through offline mode, you can submit the ASBA application to the banking branch designated as Self Certified Syndicate Bank.
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