What is IPO?
We all have been hearing so much about the IPO’s off-lately. People are talking and raving about it left, right, and center. But what is an IPO? What is the hype about it?
An IPO is an initial public offering that is open to people when a start-up or any organization decides to go public. In short common man can buy their shares from the stock market. Now, when I was looking up to know more about the entity, I was a little surprised to see the number of e-commerce platforms coming up and showing tremendous results. We all are well-aware of the Nykaa and Zomato IPO hurrah, right?
Flipkart is one of the most promising e-commerce markets in India. It has driven a lot of traffic and made numerous customers. It is definitely a pioneer in the e-commerce business in India. E-commerce is not just receiving a lot of traffic but eventually has proven to be the barrier to employment. From the delivery persons to the marketing, and customer care personnel. The employment rate has increased tremendously and played a handsome role in promoting the same. Flipkart is one of those platforms.
Zomato, a food-based e-commerce platform came into the limelight when it was subscriber 38 times. While the other amazing start-up that shined itself in the dark was Nykaa, which was subscribed whopping 80 times! Woah. Now, what do we see common in these two specific IPOs? Yes, they both are e-commerce platforms. We all are aware somewhere that digital is playing a tremendous role in today’s time and IPO is one of the sectors where it has shown amazing results.
So, if you are planning to buy an IPO, here are something that you must keep in mind.
- Check the past performance, before investing:
This is one of the most common rules before you are investing in any asset. Doing a thorough background check of the company you are about to invest in. Take Nykaa as an example, where you can observe that the company was enjoying success. It is important to know about the basic numbers in the financial market, of how the coming was performing.
- Assess and evaluate the company:
Now, post you have known about the company’s individual financial know-how. It is time to compare it to its peers. This way you get a fine idea of where does the company stands.
- Read the prospectus carefully:
When I was initially applying for the IPOs, I too was not aware of what is with the prospectus? But in order to understand the company’s financial status, the prospectus would be a Bible to you. You come to know about the company details, the past performance and overview summary.
- Don’t fall for the Hype: This is the most important step! Beware of investing anything that is being hyped. Paytm, the e-commerce platform for digital payments was one hype that targeted a lot of people. And today, the share prices of Paytm have reached almost half their price!
So, this is what are the things to be kept in mind while you invest in an IPO. Today a lot of e-commerce platforms are becoming public. So, you need to be very wise in what to put your money in and where not.
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