Thread by @ValueIn84502221

IPO Applicants Never Miss To Check These Six Points Before Applying For IPO To Avoid Regret Later.
For educational purpose.
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#sharemarket #stockmarket #investing #nifty #StockMarketindia #stockmarkets #stocks #IPOs

1) IPO Grading: Credit rating agencies provide grading to IPO. IPO with grade above 4 is considered as good. This shows financial stability of the company. Grade 5- Strong Fundamental. Grade-4 above average fundamental, Grade-3 above average fundamental
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2) Proportion of Fresh Issues and Offer for Sale (OFS) in IPO-
Fresh Issue: Means company is issuing new shares & selling to the investors via IPO. Money raised through sale of fresh issue shares in an IPO goes to company & utilized as mentioned in the IPO document.
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Offer for Sale: means selling of shares by an existing promoter/investor of the company. In OFS company does NOT receive any money raised via OFS.

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If OFS proportion is greater than Fresh Issue: Indicates that promoters are selling their stake.
If OFS proportion is lower than the Fresh Issue: it usually indicates company’s good future growth outlook, promoters not selling their big stake, conviction on their business.
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3) Reason For Raising Funds: If funds will be used for business expansion or debt retirement etc (good rationales). Avoid if fund will be used to meet working capital requirements (not good).
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4) Share Valuation: Share should not be overpriced. Use P/E, P/B & P/S ratios to compare with same sector companies already listed and with sectoral index.
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5) Financial Performance: Growing revenues and profits over the past years is good sign. Loss making company IPO must be avoided
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6) DRHP (Draft Red Herring Prospectus). All information about company business, financial performance etc are available in this document. Company files DRHP with SEBI. Must read DRHP before applying for IPO.
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For more details further self study is required.
This is for educational purpose only.

Keep Learning Keep Growing

Wish you The Best !!!

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