8 Things To Check Before Investing In An IPO, English
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Are you jumping into the IPO bandwagon? Wait and check out these 8 things before trying to grab shares in an initial public offering.
Edited Highlights
0:26 This video discusses the important things people need to keep in mind while investing in IPOs
0:55 What should be keeping in mind while investing in IPOs?
1:28 Ask yourself whether you are investing in the IPO for listing gains. In that case you become a trader
1:43 You maybe a long term investor
1:48 Remember, the share may or may not list at a gain
1:56 Remember, compared to a listed company, IPO is a higher risk investment
2:01 On top of that if you are looking at a listing gain, you are taking a substantial risk
2:12 In an IPO, you do basic research on the company like you would do for any stock
2:30 Find out the various risks the company is facing be it in the industry, competition, technology, government policy, international competition and so on
2:53 You also need to know why your money will be growing
3:05 Ask yourself whether the management will be able to deliver the potential growth
3:15 Do they have a track record and how are they qualified to deliver that growth that will translate into gains for you as a shareholder
3:25 Find out how the money will be used and ask yourself whether you are convinced about the details provided by the company in its disclosures
4:13 The next issue is the IPO price
4:25 Find out how stocks in the same industry priced
4:38 If a premium is being charged, find out what is the reason behind it
5:19 People chasing an IPO is not an indicator of the value of the investment
5:24 Oversubscription of an IPO is all about demand and supply of the share and is not linked with its value
5:43 Never borrow to invest in IPOs
