Frequently asked Questions
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How to select right IPO?
The right way to choose an IPO is to check for the QIB (Qualified Institutional buyer) category. If you find that the QIB is oversubscribed, it is a sign that you can go ahead with investing in that IPO. Also look for price to earnings ratio, price to book ratio as well as return on equity.
How does over subscription affect the listing gains?
In India, the IPO listing takes up to 7 working days. Though there is no studied relationship between over subscription and IPO listing price, over subscription could be the reason for a good listing of the shares, market conditions, and reasonable price.
When there is an oversubscription, it means the company cannot allot the shares to the bidders as there is an excess demand for the stock. On the basis of the category of investors, the allotment differs.
How does investing in IPO’s primary market benefit an investor?
Mainly an investor gets to buy shares at affordable prices before the listing price. Retail investors enjoy the discounted rates too. It gives the investor ample opportunity to further invest in the company in the future.
The motive behind primary market is to provide investors the opportunities to buy shares at an affordable price prior to its listing price. In addition to that, the retail investors get to enjoy the perks of discounted rates while applying for IPO’s. When an investor holds shares during the primary market period, he gets an opportunity to participate in the future success of these companies. Thus, for an investor getting stock at the lowest price, no refund hassles involved, no brokerage or other charges and chances to invest at a discounted price than the cut-off price of the stock
Why should you always involve a stockbroker?
When you go through a stockbroker, you have the advantage of applying for IPO either through offline mode or online. Besides, the stockbroker agencies are well-versed with about recommendations and have the best advisory team to guide you to invest in the right market.
What are the kinds of instruments’ offered by an IPO?
The financial instruments are typically offered in the form of equity shares, non-convertible debentures, and bonds.