The Indian stock markets have seen a flurry of activity in recent times. Companies go public and raise funds for various reasons, including funding growth, operating expenses, undertaking capital expenditure, and other purposes. But why should investors consider putting money in an IPO?
Listing Gains and Early Investment
One of the main reasons to consider IPO investments is to profit from its listing day gains. If the price on the first day of listing goes higher than the listing price or the IPO price you paid while buying the shares, it is called a listing gain.
Often, after a public listing, a company with solid fundamentals ends up garnering considerable demand in the market. This demand pushes the company's price on stock exchanges, opening up possibilities for significant gains for investors. Most IPOs offer discounts to retail investors on IPO prices. Applying through a retail quota gives you a starter's advantage. If you do your research correctly and make a suitable IPO investment, you stand the chance of making significant listing gains.
Participating in the IPO of a company you believe in also gives you the chance to be part of its journey from the initial stages. Not only will this give you a sense of ownership of the company, but it will also give you access to the company's growth journey. That means that the more profit the company makes, the more you benefit from it. IPO investments are a great way to generate wealth in the long term.
Another way to look at IPO investments is as an opportunity to invest in winning stocks right at the start at competitive prices, which provides you with a window to make earnings via a stock appreciation in the long run.
IPO investments are advantageous on various levels for investors. Low IPO prices, a chance to get in early on the company's growth journey and make considerable gains on listing prices, and in the long term, are good lures to invest in IPOs.
However, you should note that not all IPOs are created equal. The future of a company going public depends on many fundamental, economic, and geopolitical factors. That is why it is essential to do your research before investing in an IPO.
ICICI Direct allows investors to monitor other upcoming IPOs listings to decide which investment is best for them. You can also access company research to understand the company's fundamentals going public. Investing in IPOs through ICICI Direct is quick and straightforward, with minimum hassles.