What is an IPO?
An Initial Public Offering (IPO) is animportant stage when a private company issue shares for the public in the capital market to invest in. This is a common step for companies after several years of sustained growth. By issuing an IPO the company aims to raise funds for further growth and expansion. It also helps that the founders or the early investors gain full profits from their initial investments. Issuing an IPO is a fund-raising process that allows the public to be part of the company’s growth and offerings.
Additional things to know about IPOs
- The companies hire investment banks and financial advisors to decide on the amount they want to raise from the market, equity price, IPO date, etc.
- Companies must fulfil the required criteria set by SEC and other exchanges to float an IPO.
- As a private company, the company depends on the initial investments made by the founders, angel investors, and venture capitalists.
- It is considered that the company has matured enough to raise huge capital from the market and is capable to hold the benefits and responsibilities towards public shareholders.
- The company which is interested to hold an IPO markets its interest by making a public statement.
Upcoming IPOs in 2023
Some of the biggest IPOs that are happening this year are:
- GoDigit Insurance – This SME is looking to raise 3500 cr from the market by floating IPO
- GoAirlines – A budget airline in India, wishes to raise Rs. 3600 cr with a face value of Rs 10
- Mobikwik – a digital payment platform has planned to raise Rs. 1500 crore with its IPO round
- Ixigo – a popular travel booking platform wishes to collect Rs 750 crore through the IPO route
- PharmEasy – this medicine delivery platform will bring IPO with an issue size of Rs 6250 crores
A few other upcoming ipo that the investors are looking for are JG Chemicals IPO (Rs. 252 cr), Survival Technologies IPO (Rs. 1000 cr), Cyient DLM IPO (Rs. 740 cr.), and more. There are a few more in the list where the issue size has not been announced yet. The list includes Mamaearth IPO, Tata Technologies IPO, Snapdeal IPO, Sterlite Power Transmissions Ltd IPO, KeventerAgro IPO, Ola IPO, and more. Thus, 2023 is going to be an exciting year for investors who wish to participate in these IPOs and earn good returns in the long-term.
How to invest in IPOs
The process to apply online for IPOs is simple. You need to go to the IPO section in your stockbroker’s app, where you need to choose the ipo you are looking for. You select the number of shares to purchase and place bids against the UPI transaction. You will also be needed to fill up an ASBA form provided by the stockbroker before you can apply for the IPO. The amount you bid for will be blocked by the bank until the IPO takes place. Most companies that go the IPO route are expanding companies with moderate to high growth potential. They adhere toandmeet certain criteria under the SEBI guidelines. The entire fund-raising process is transparent, and it protects the rights and investments of the investors.