Ways to analyze IPOs well (IPO analysis)

Ways to analyze IPOs well (IPO analysis)

IPO analysis

Before investing everywhere, you have to understand their limitations. If you go to an area without knowing it, it is just like - come and kill me.

So if you are going to invest in the IPO of any company, then you should know how to analyze that IPO.

By the way, there are many ways to analyze IPO, among which we are telling some methods -

›Company information and its management-

First of all, go to www.sebi.gov.in and read the red herring prospectus of that company. In this, you will get all the necessary information about the company, such as - In which sector does the company work? What is the participation of this particular company in that sector? Along with this, you see and understand the management of the last few years of that company. After that, you will be able to analyze the management of that company.

›Future plan of the company -

Before investing in any company, you must know the future plan of that company. Every company tells its future plans in its red herring prospectus, from there you will know the future plans of the company. To understand the future plan better, you also have to be updated with the news related to the IPO of that company.

›Company promoters and shareholders -

You have to know about the promoters of that company. Need to see how people are involved in the promoters of the company?

If the promoters or shareholders of that company include big businessmen of the country, then that company will definitely be a good company. In this way, your analysis time will also be saved and you will be able to connect with a better company. Big businessmen keep a check on the business more than us because they have been playing this game related to shares for a long time.

›Analysis of the industry - Overall analysis of the industry of that company has to be done in a way. You have to see how much stake the company is making in its particular industry.

Like- if a cement company is bringing its IPO, then we have to analyze the cement industry what are the opportunities regarding cement in our country? And how much stake in the cement industry does the company come up with IPO?

›Competitors of that company in the industry - While analyzing, it must be noted that how are the competitors of that company?

You will also get information about the company's competitors in the red herring prospectus of that company. By looking at the position of competitors there, you will be able to see the position of the company.

›Financial overview -

This is very important to see because it will enable you to get financing information from the company. Will be able to know the performance of the company for a few years. Profits of the company will be able to analyze information like revenue. You will also find information in the red herring prospectus of the company.

›Statics overview - 

You must prepare this overview by yourself. By gathering all the information of the company, you have to know all the fundamental aspects of that company like- NAV-net assets value, ROE-return on equity, RONW-return on net worth and P / E-price to earning.

When you analyze a company in this way, you will not have to think much while investing in its IPO.

›Analysis of other subsidiary companies of the company- Along with analyzing the company whose IPO you want to invest in, you will also have to analyze its subsidiaries.

If Reliance Industries is bringing an IPO of its subsidiary Jio Company, then we will also have to analyze its other Subsidiary companies like - Reliance Petroleum, Reliance Retail.

›Company Demand-

What is the last and very important point in the demand of that company in the market? What is the name of the company bringing the IPO and people in the market or say its brand (brand) will also have to be seen? If the company is strong and popular among the people, then its IPO investment opportunities increase.

It is most important to be emotionally strong before and after investing, because only when you are emotionally strong will you be able to take the right decision. Before investing in the IPO of any company, you read and understand the red herring prospectus of that company leisurely and many more. By doing this you will reduce the chances of loss in buying an IPO.

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