This article provides an insightful overview of upcoming initial public offerings (IPOs), along with their respective start and end dates, price ranges, and key IPO terms. An IPO (Initial Public Offering) is an important milestone for a company that marks its entry into the stock market. This allows companies to raise capital by offering their shares to the public. As an investor, understanding the benefits and risks of investing in an IPO is essential to making informed decisions. Explore the potential rewards and challenges that come with investing in these exciting new opportunities.
List of upcoming IPOs in 2023
This is a list of upcoming/recently offered major IPOs.
Key terms in the IPO process that investors need to understand
1) IPO issuer: This is a company that has issued major IPO shares for offering.
2) IPO opening date: This date is the start date of the IPO bidding process.From this date, investors will be able to apply for his IPO
3) IPO Completion Date: This is the closing date for the IPO bidding process. Investors can apply during the IPO start date and completion date. From now on, he will not be able to apply for an IPO. However, investors can purchase shares after listing on the stock exchange.
4) IPO issue price range: The issuing company presents an issue price range (lower price range and upper price range) that investors can estimate the price at the time of IPO application.
5) lot size: The minimum number of shares an investor can apply for an IPO. A lot size of 100 means that an investor must apply for a minimum of 100 shares.
6) Listing date: Once the IPO process is over and the issuer has finalized its shares and deposited them into investor accounts, these shares must be listed on the stock exchange (NSE or BSE or both) called Listing Date.
What are the benefits of investing in an IPO (investor’s perspective)?
- Opportunity to invest early in promising companies.
- Potential for significant capital appreciation if the company succeeds.
- Access to a wide variety of investment opportunities in public markets.
- After the IPO, the shares can be bought and sold easily, resulting in high liquidity.
- Increased transparency and regulatory oversight compared to private investments.
- Ability to participate in the growth of a well-known and successful brand.
- If the company becomes profitable, it is possible to receive dividends.
- An opportunity to support and be a part of the company’s growth process.
- Through an IPO, you can come into contact with new fields and industries.
What are the benefits of an IPO for an issuer?
- Access to capital for business expansion and growth.
- Increased popularity and credibility in the market.
- If the company performs well, it can generate significant capital gains.
- Ability to attract new investors and build a diverse shareholder base.
- Enhanced financial transparency and regulatory compliance.
- Establishing a market price for the company’s stock.
- Potential for increased media coverage and public attention.
- Utilization of stock options to attract and retain talented employees.
Quick tips for evaluating an IPO before investing
- Review the company’s prospectus to understand its business, products and growth plans.
- Evaluate company financial statements for steady revenue growth and profitability.
- Evaluate the industry outlook and the company’s position in the market.
- Identify the company’s competitive advantages and unique strengths.
- Examine the experience and track record of management.
- Understand how the funds raised in an IPO will be used.
- Be aware of potential risks and challenges your company may face.
- Compare IPO prices to company fundamentals and peers.
- Consider the reputation and credibility of the IPO underwriter.
- Gauge the demand and interest of institutional investors and the general public.
What are the different risks in IPO investment?
Investing in an IPO involves various risks that potential investors should be aware of. Common risks associated with IPO investments include:
Market Volatility: Stock prices of newly listed companies can be very volatile in response to sudden market fluctuations.
Limited historical data: IPOs often lack a substantive track record of financial performance, making it difficult to assess their long-term prospects.
Uncertain future performance: There can be no guarantee that the company will perform as described in the prospectus and could result in potential losses for investors.
Lack of information: Compared to incumbent companies, IPOs have limited information available to the public, making a thorough analysis difficult.
Price too low or too high: The IPO price may not accurately reflect the true value of the company and may be overvalued or undervalued.
Lockup period: Company insiders, such as employees and early investors, are subject to a lockup period and may be restricted from selling shares immediately after the IPO. This could lead to a flood of selling once the lockup period ends, driving the stock price down.
Market sentiment: Overall market sentiment and investor appetite for new products can have a significant impact on the performance of IPO stocks.
Regulatory and legal risks: An IPO involves a complex regulatory process and compliance requirements, and non-compliance can lead to legal consequences.
Poor post-IPO performance: Some companies experience share price declines after an IPO due to a variety of factors, including operational challenges and unfavorable market conditions.
Low trading volume: Newly listed stocks may initially have low trading volume, making it difficult to buy or sell the stock at the price you want.
Allocation bias: Individual investors may have lower share allocations compared to institutional investors, which may affect potential returns.
Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and he is a NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
