What Initial Public Offering (IPO) in India: Top Facts & A Complete Investment Guide

IPO Initial Public Offering Review

IPO Initial Public Offering is a very profitable investment that attracts every person around the world.

A dilemma arises whether to invest or not. In fact, everyone from the businessman and job holder to the student aspires to invest in IPO (Initial Public Offering) or Stock Market Launch in an expectation to earn. 

Yes, it is a great investment that ensures an excellent return. A coin has two sides.  Similarly, investing in an Initial Public Offering or Stock Market Launch may not always bring you profits.

Undoubtedly, the profit is always there. However, without being a little concern you may not draw profit. No worries! We are here to guide you.

Important Facts About IPO (Initial Public Offering) Companies And IPO Process Steps

Indeed, it is also a very common concern by most of the investors how IPO (Initial Public Offering) or Stock Market Launch process steps. You know what? The Initial Public Offering launches with some important process steps. 

In addition, such IPO process steps are in fact daunting tasks initiated by the IPO companies.

The investors and companies are also concerned about the advantage and disadvantages or Stock Market Launch. 

To keep in mind all of these queries, we are here to inform all of your queries. In fact, after reading this article, you will thank us. We tried our best to make it easy and simple so that every walk of people may understand this article easily without any confusion. 

We have also tried to give you a clear guideline to investigate before you invest in IPO (Initial Public Offering) or Stock Market Launch.

Actually, what you should never forget is to look for IPO Calendar, IPO Companies, Upcoming IPOs and even to extend your knowledge, you can study process steps in India, USA, and IPO rules.

Initial Public Offering (IPO) India
Initial Public Offering (IPO) India

What Is Initial Public Offering IPO Or Stock Market Launch?

IPO (Initial Public Offering) or Stock Market Launch alludes to the way towards offering portions of a private partnership to people in general in another stock issuance.

It actually opens an offer of issuance that enables an organization to raise capital from open speculators. 

In fact, the progress from a private to an open organization can be a significant time for private speculators to completely acknowledge gains from their venture since it ordinarily incorporates share premiums for current private financial specialists.

In the interim, it likewise enables open financial specialists to take an interest in the advertising. 

An organization arranging an Initial Public Offering or Stock Market Launch will normally choose a guarantor or financiers.

They will likewise pick a trade wherein the offers will be issued and consequently exchanged openly.

Furthermore, we have already mentioned that the IPO (Initial Public Offering) companies go through IPO process steps to launch in a stock market.

When the term comes that an investor is going to buy IPO (Initial Public Offering) or Stock Market Launch, the IPO can be divided into two categories:

Types Of IPO Initial Public Offering

1. Primary IPO (Initial Public Offering)  

This is the first time IPO (Initial Public Offering) or Stock Market Launch offered by the companies that the public applies to invest. And later, some public gets this IPO from the company directly with a process.

In addition, there are many initial public offering companies that every year offers stock investment from the public. Thus, anyone can apply for this Primary IPO with a process.

The IPO process for an investor is not very difficult to proceed. The investors need to open a BO account in a bank to apply for the primary IPO.

2. Secondary IPO (Initial Public Offering)

This is, in fact, the second-hand IPO (Initial Public Offering) or Stock Market Launch which has already been bought by the investors, the public. So another investor can buy it from the previous investor.

In fact, this is also a great investment. Actually, you cannot wait for a Primary IPO. You may not get a lot of primary IPO instantly. That is why Secondary IPO demands are always high in the stock exchange.

Most of the time, the businessmen deal with secondary IPO. You know what? Every day in India a huge transaction takes place in buying and selling secondary IPO.

Historical Background Of IPO (Initial Public Offering) 

You know what? The first and modern IPO (Initial Public Offering) or Stock Market Launch established in 1602. Then the Dutch East India Company opened shares for the public.

It was the month of March when in 1602 the Dutch East Company wanted to increase the main capital to run its business. Thus, they offered shares to the public to get a good investment to run the business.

On the contrary, the common people, the investors achieved profits. It actually was proven over time that the investment is a very profitable investment for the investors.

Such an amazing stock exchange thus started to grow over time. Gradually, it brought a revolutionary change in the stock exchange business and investment over the world.

It indeed draws greater interest among people and companies from the United State to Indian IPO with IPO process steps.

Top Biggest IPO (Initial Public Offering) Companies In The History

  1. Facebook, the American Giant, sold 421.2 million shares in a single day and this single day was the first day of trading! Facebook offered an Initial Public Offering or Stock Market Launch on the 18th of May 2012. In fact, it is a great example that when a very reputed company offers IPO, the reputed company gets fast attention from investors.
  2. You know that AT&T wireless is also a giant telecommunications company. This giant company credited a huge amount of shares on the first day of IPO (Initial Public Offering) or Stock Market Launch. The IPO opened on the 26th of April 2000.
  3. OAO a state-owned oil company of Russia credited $10.65 billion in the capital as an IPO (Initial Public Offering) or Stock Market Launch offer on the 13th of July 2006.
  4. The Bank of China on the 23rd of May 2006 credited $ 11.1 billion during the first day of IPO (Initial Public Offering) or Stock Market Launch
  5. The German Telecommunication Deutsche Telekom AG credited $ 12.48 billion during the first day of the IPO (Initial Public Offering) or Stock Market Launch.
  6. Nikkei, the Japanese giant mobile company credited $ 18.4 billion capital during the first day of the IPO (Initial Public Offering) or Stock Market Launch.
  7. The Agricultural Bank of China (ABC) is in the leading position in history since this bank credited $19.2 billion during the first day of the IPO (Initial Public Offering) or Stock Market Launch.

The Amazing Process Steps Of IPO (Initial Public Offering) or Stock Market Launch 

When a company fixes that it needs to raise its capital to grow business, it starts to offer initial public offering. Thus the company goes in public. In fact, a company may go in public with a process that usually takes six months to a year.

Firstly, the company needs to select a bank. The investment bank looks after underwriting services. Again, the bank may also provide securities to investors. Secondly, the next step is, in fact, a greater step for the company.

In such a step, the company goes through the acts which the broker and issuing company and investing company will go through. Agreement, Firm Commitment, Syndicate of an underwriter are prepared in this step.

Thus the following documents are processed:

  • A.   Letter Of Intent
  • B.   Engagement Letter
  • C.   Underwriting Agreement
  • D.   Red Hiring Document

Thirdly, the price fixation takes place. The price is actually of each share portion is selected. Fifthly, Stabilization is ensured and finally, transaction to market completion takes place.

In addition, the transaction starts after the 25 days of the initial public offering. This is actually Initial Public Offering process steps through which every IPO companies come across.

Top Advantages Of IPO (Initial Public Offering) or Stock Market Launch

Since Initial Public Offering (IPO) or Stock Market Launch is initiated to raise the capital of the company, it has the first and foremost advantage that it gets its desired capital from a large number of investors, especially the public.

Again public popularity also rises due to the stock market launch. Sometimes even a small company gets public popularity when it offers public investment.

In return, the company gets an easy investment to run the business. After all, you all know that investment is a prerequisite to run a business.

Such an easy investment also increases business opportunities. Furthermore, the company gets enlisted into a major stock exchange.

You know what? It is, in fact, a prestigious milestone for a company to be enlisted into a stock exchange.

Few Disadvantages Of IPO (Initial Public Offering) or Stock Market Launch Companies

You know what? Going to the public as an IPO (Initial Public Offering) or Stock Market Launch is not a very cheap process. Actually, the company needs a lot of investment to go through such a process.

In addition, the process does not take a month. It consumes a long time which already we have mentioned – it takes six months to a year. What more? The company needs to give full concentration when the process is on the way.

We have also mentioned that the company needs to prepare a lot of documentation which in fact increases the activities of the company. You know obviously that the company needs to pay fees during documentation and deal with the bank.

Again the most complicated task for the company is to answer the investors when it goes public.

Obviously, the company needs to answer the public quarries appropriately or else the company may not get investors. The company also sacrifices short time profits to draw the attention of the investors, which in fact is the most striking point of extra expenditure for the company.

The shareholders are also part of the company. So the management team is organized in a new way than it was in the past.

Types of IPO
Types of IPO

An Easy Investment Guide For IPO (The Initial Public Offering) For A Greater Profit

Before investing in the IPO (Initial Public Offering) or Stock Market Launch, it is actually very important to study. If you study perfectly, there is obviously a great chance to see the profits.

In fact, it is no denying facts that people invest in the IPO (Initial Public Offering to get profit but unfortunately, sometimes people receive loss by investing in Initial Public Offering, especially in the secondary IPO.

Now, you may ask- what strategies should you follow? Well, let’s discuss without further delay.

The Primary IPO (Initial Public Offering) or Stock Market Launch

  • Almost every primary IPO (Initial Public Offering) or Stock Market Launch investment is profitable. In fact, there is very little chance of loss.
  • Look into the company’s prospectus and past profit history, which obviously will help you to determine whether the company is progressing year by year or not. Yes, you must never neglect the IPO companies’ calendars.
  • Be sure about the products of the company. For example, the company is going to produce such a product that has no market value in the country. Then, actually, it is not wise to apply for Initial Public Offering or Stock Market Launch.
  • To invest in primary IPO (Initial Public Offering) or Stock Market Launch, always study the upcoming IPOS 2019, 2020 and so on. Even you can also study the past IPO companies’ colanders like IPOS 2016, IPOS 2017, and so forth.

The Secondary IPO (Initial Public Offering) or Stock Market Launch

  • You must look into the past calendar of the profits of the company before investing.
  • The last one to two years’ profit and loss data will help you to determine the fluctuation of each share in the market and obviously, you can get a clear view of those IPOS companies.
  • Study the rival company as well. The rival company may any time grab the market which may result in a great loss for this company.
  • It is always wiser to fix that you may sell the secondary IPO (Initial Public Offering) or Stock Market Launch after a long time, meaning you may hold your investment for a long time. Actually, you may not be able to get a profit overnight in such a case.
  • Study the secondary IPO (Initial Public Offering) or Stock Market Launch profile when it was upcoming IPOS like 2017 and 2016 and so on. This, in fact, will give you a clear idea of whether the company could fulfill its target goal.
  • Do study the stock exchange regularly since it is beneficial for you to know the stock market. In addition, you are obvious that there are many sites that show updated and live data of the stock exchange.
  • Discuss your friends and relatives who are involved in Initial Public Offering or Stock Market Launch business because it will increase your knowledge of the investment.
  • You can also take expert guides. There are many exchange companies which offer an expert guide. In such a case, you may start taking an expert guide from these companies. In fact, these exchange companies’ experts have great knowledge of IPO process steps, and IPO companies. They may also provide you with the IPO calendars. You can easily collect calendar 2018 and even calendar 2017 from them.
  • There are many sites on the internet which publishes articles and surveys on IPO (Initial Public Offering) or Stock Market Launch market strategy and guidelines. In fact, you should read these articles and surveys. Obviously, your study on such articles will polish your knowledge and can make you an expert investor.  

Bottom Line

IPO (Initial Public Offering) or Stock Market Launch is obviously a great medium for both companies and investors. In fact, it is a great medium to earn or to expand the business.

As an investor, if you are concerned enough and if you follow our tips on investment, surely you can get a good profit. As an investor, always study the stock exchange which will definitely help you to understand the market.

We have already mentioned that you must study IPO rules, IPO calendar and so forth. Again if you are a businessman and thinking to start an IPO (Initial Public Offering) for your new company, this article will definitely help you to understand the IPO process step. 

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Stockquantum was founded by Dharmendra Mukati in 2018. I am a Trader and Investor in the last 10 years. I am writing here about stock broker review, broker comparison, IPO investment, Crypto currencies, technical analysis, fundamental analysis, sub brokership, mutual fund, personal finance, and our experiences.