How to Select Best IPO: After the year 2023, there is a lot of activity in the IPO market (IPO 2024) in 2024 also. 5 companies launched their IPOs in January 2024, while 4 IPOs have opened so far in February, while the fifth IPO will open on 9 February. The number of IPOs may increase further in this month. At present, there is activity in the IPO market and this action is going to continue in future also. In such a situation, if you also invest money in IPO by paying attention to some special things, then you can get high returns. Know what to keep in mind while investing to make money from the IPO market (IPO Investment Tips).
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3 new IPOs on the same day
Today in February i.e. 7th February is very special and today 3 new IPOs worth Rs 1700 crore have opened simultaneously. These include Jana Small Finance Bank, Rashi Peripherals and Capital Small Finance Bank. The IPO of these three companies will close on 9 February, while their listing will take place on 14 February. It is believed that 2024 may be better than 2023 in terms of IPO. Many big companies are ready to be listed in the market in future. In such a situation, we are giving some tips here, by following which you can also choose a better IPO and get better returns (Blockbuster IPO).
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Share is cheap and expensive: see valuation
Be sure to check the valuation of shares in any IPO. Don't go by the share price in IPO. A share that seems cheaper in price may be more valuable than a share with a higher price. P/E i.e. Price/Earnings ratio tells whether a share is expensive or cheap at the current price. The higher the P/E, the more expensive the share is. Compare the P/E ratio with other companies in the same industry and approximately the same size. At the same time, by looking at the EPS of the company, it is known whether the revenue, margin and market share of the company is increasing or not. There is scope for high returns in the shares of a company which has growth in its financials.
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Is the company making profits or not?
Before investing money in IPO, definitely check the financial position of the company. Check whether the company is profitable or not. If profits are coming then is it expected to continue in future or not? If a company is continuously profitable then the market sentiments regarding it also improve. Such companies can continuously invest money in business. Further dividends can be given to investors.
company business model
Market experts say that if you want to become a successful investor then invest money in the right business. In today's tough competition, any company survives for a long time or becomes a sector leader only when its business model is sustainable for a long time. Companies which innovate according to the needs of the customers of their sector, make changes in the product, change the business model, they have more chances of surviving in the market.
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debt position of the company
Before investing money in the company's IPO, check how much debt the company has. If the company has high debt then it has to spend a huge amount to repay it. Whereas companies which are debt free or which have very little debt or which are continuously reducing their debt, they can invest a part of their profits in expanding the business. If the company is generating free cash flow then it means that That the opportunities for further growth are good. A company that generates cash flow can easily eliminate its debt.
Check track record of promoters
It is very important to look at the background of the company's management and promoters. Companies with good management or promoters have more chances of growth, because their focus is on continuously strengthening the business by maintaining better relations with customers and investors.
(Source: From the websites of different brokerage houses)