The following are the important points you should consider bef | Finance knowledge Technology

The following are the important points you should consider before investing in an Initial Public Offer

Higher promoter stake is always preferable as it tells us about the sense of responsibility and preferably the promoter will try to take the company to new heights.

Look for the issue size of the IPO. Bigger the issue size, higher is the promoter's capability.

conduct a background check on promoter's capabilities.

Look for the projects in the pipeline and also its size as it will tell us about company's scalability going forward.

Lastly, in case of big companies, do not involve in speculative gains but focus on long-term wealth creation.

Read DRHP
Key points to look in Drhp
. Issue Summary
. pre IPO placement
. Objective of the Issue
. Company Background & Business Profile
. Business Promoters & Management
. Concerns & Risk Factors
. Financial Statements

There are both pros and cons associated with an Initial Public Offer. Hence, before you invest in an IPO, it's always preferable to devote a lot of time into research since it will provide you with valuable insight both about the company and the people managing the same.



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