Stock markets – whether you love them or ignore them or hate them, they are important facilitators of commerce and barometer of a nation’s economy and future outlook. An Initial Public Offering (IPO) is the action of an initially privately-held company becoming public i.e. being traded on stock exchanges like National Stock Exchange (NSE) or Bombay Stock Exchange (BSE) for the first time. An IPO allows a regular investor or trader to buy and sell shares of the company.
COVID-19 is a bottleneck that is wreaking havoc with majority of businesses and lives, and may soon be joined by another pandemic Cat Que. However, the future seems to be bright as the Indian stock exchanges are witnessing a consistent rise in the launch of IPOs and the ones that have been have no shortage of buyers throwing in money to get their share in the ownership of the company.
At the time of writing, companies Angel Broking, Chemcon Special, and Computer Age Management Services (CAMS) have completed their IPO with oversubscription i.e. more buyers than the stock available for purchase. Also, companies Mazagon Dock Shipbuilders, UTI, Sigma, G M Polyplast, AAA Technologies, Veer Global Infraconstruction, Bodhi Tree Multimedia are in the pipeline.
The current basket of companies becoming public comes from a variety of sectors and industries. The bulk of the companies are from finance sector like share registrars, retail broking services, asset management companies.
Investing or trading in IPOs is a personal choice. Often, IPO releases are clustered in a stock market which has been rising from the last couple of months and most investors or traders expect the same to continue. Some people believe their prediction sufficiently enough to risk their capital. Many individuals who buy an IPO often make a windfall gain often on the day of listing itself. Still, some others may lose a sizable percentage of their capital.
In stock markets no services are rendered to the person whose money is taken by the person in profit in any given trade, except for the risk they took by exchanging their capital for the stock. Thus, every person has to decide on their own, how their journey in the stock market, will if any, will pan out.