After Diwali, there has been an increase in activity in the IPO market. During the current week, 5 big IPOs will remain open till October 24. These five companies are raising Rs 7,378.67 crore from the primary market (IPOs).
Among these, the IPO of Indian Renewable Energy Development Agency (IREDA) is open from 21st November to 23rd November. Whereas from 22 to 24 November, IPOs of Fedbank Financial Services, Gandhar Oil Refinery India, Flair Writing and Tata Technologies are open.
Who is raising how much money from IPO?
- Indian Renewable Energy Development Agency (IREDA) 2150.21 Cr
- Fedbank Financial Services (Fedbank Financial) 1092.26 Cr
- Gandhar Oil Refinery India 500.69 Cr
- Flair Writing 593.00 Cr
- Tata Technologies 3042.51 Cr
Even after this, many small and big companies are in the queue to launch IPO. The companies whose IPO is being discussed include companies like Balaji Specialty Chemicals, Aadhaar Housing Finance, Navi Technology, MobiKwik, Ixigo, Snapdeal and OYO.
2023 better for IPO market
The current year has been better for the IPO market so far. This year there have been some IPOs which have given 100 percent or even more returns to investors.
Company Return
Plaza Wires 104%
Utkarsh SFB 103%
Senco Gold 121%
Cyient DLM 152%
Apart from these, there are many IPOs which have given 50 to 90 percent returns since listing. At present, there is a stir in the IPO market and this action is going to continue in future also. In such a situation, if you also invest money in IPO by paying attention to some special things, then you can get high returns. But to make money from the IPO market, it is important to keep these things in mind while investing.
1. Pay attention to the company’s financials
Before investing money in IPO, definitely check the financial figures of the company. Whether the company is profitable or not, whether it can maintain a track record of profits in future or not. Market sentiments about profitable companies are also better because such companies can continuously invest money in the business and can also give future dividends to the investors.
2. Share valuation
Instead of looking at the share price in an IPO, see what its valuation is like. A share that appears cheaper in price may be more valuable than a share with a higher price. For this, consider the P/E i.e. Price/Earnings ratio, which tells how expensive or cheap a share is at the current price. The higher the P/E, the more expensive the share is. Compare the P/E ratio with companies in the same industry that are approximately the same size. There is scope for high returns in the shares of a company which has growth in its financials.
3. Whether the company will survive in the future or not
Experts often say that if you want to become a successful investor then invest money in the right business. In today’s tough competition, any company can survive for a long time or remain strong in its sector only when its business model is profitable in the long run. Apart from this, it is also important for the company to focus on innovation according to the needs of the customers. Only a company that focuses on changing its business model with the times and innovating its product portfolio can consistently show strong business performance.
4. Stay away from companies with high debt
Before investing money in the company’s IPO, check how much debt the company has. If the company has high debt then it has to spend a huge amount to repay it. At the same time, companies which are debt free or which have very little debt or which are continuously reducing their debt, can invest a part of their profits in expanding their business. If the company is generating free cash flow then it means that the opportunities for further growth are good. A company that generates cash flow can easily eliminate its debt.
5. Track record of promoters
It is also very important to look at the background of the company’s management and promoters. Companies with good management or promoters have more chances of growth, because their focus is on continuously strengthening the business by maintaining better relations with customers and investors.
