How to Spot a Winning IPO Key Signs Every Investor Should Know

Investing in an IPO (initial public offering) can be a great way to get an early stake in a potentially high-growth company. Investing in an IPO can be exciting, but it comes with a risk because not all IPOs are created equally. Some generate massive returns, and some may fizzle shortly after the launch. 

In this blog, we will learn about the key signs that can help you spot a winning IPO, and highlight red flags that might signal it’s time to stay away. We will also discuss how to evaluate upcoming IPOs and avoid common mistakes.  Whether you are checking the IPO allotment status or scanning the upcoming IPO list, this blog is for you.

 

What Is an IPO?

An IPO (Initial Public Offering) is when a private company offers its shares to the public for the first time. It's a strategy for businesses to raise capital and gain credibility in the market. If you're an investor, getting in early on a new IPO might sound exciting, but with the growing number of new IPOs and upcoming IPO this week, it's important to distinguish hype from real value clearly. It's crucial to evaluate each one wisely.

 

How to Check IPO Allotment Status

After the application, there is always the question mark: Have I been allotted?

This is how to know IPO allotment:

• Go to the site of the IPO registrar (e.g., Link Intime, KFintech)
• Touch in either the PAN, DP ID/Client ID, or application number
• Or visit the official NSE website to know the NSE IPO Allotment status

 

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• IPO allotment status
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How to Spot a Profitable IPO: Signs of a Winning IPO

 

1. Get to the Basics of the Company

Check the companies:

• The trend of revenue and profitability
• Debt levels
• Cash flow
• Prospects of future development

Businesses with good balance sheets and stable growth in earnings are better IPO targets.

 

2. Learn Business Model

The most important aspect is a simple and scalable business model. When the business addresses a problem in real life and carries a competitive advantage, it should be treated well.

 

3. Inquire About Promoter's Background

The presence of credible management and a past record of promoters offers an indication of stability. Abusive companies that have had episodes of fraud or poor governance avoidance in the past are to be avoided.

 

4. Notional Comparisons

Compare the post-IPO valuation and listed peers. However, you should consider waiting if it is too costly in comparison to other similar companies.

 

5. Observer Demand by Watchers

When there is an interest in institutional investors at the IPO stage, then there is a lot of confidence. A green light may be an IPO that is subscribed to or oversubscribed to, but this is not necessarily the case.

 

Red Flags to Watch Out For

• Overhyped without foundation

Watch out for IPOs that are overhyped and have poor performance.

• Loss-making without any way to make profit

 Some IPOs guzzle cash without an end, so IPOs with caution.

• Intense insider selling

Make inquiries when founders and first investors are dumping their stocks.

 

Keep an Eye on the Upcoming IPO List

Follow the IPO list coming every day to be ahead. The following is to be observed:

• NSE/BSE New IPO list
• This week's upcoming IPO across sectors
• Most popular soon-to-be-IPO by hype and value

IPO calendars and alerts are usually given on financial websites as well as brokerage apps.

 

IPO Opening Timing

Trading hours for making a bid on IPO start at 10:00 AM and end at 5:00 PM on trading days. Always bid it early and watch out for cut-off pricing.

 

SIP or IPO? Where Should You Focus?

Don't overlook long-range instruments such as SIPs. Though IPOs have the potential of providing high returns, SIPs generate a steady fortune. Plan wiser investments with the help of such tools as a Step-Up SIP Calculator.

 

Conclusion

When selecting a good IPO, one needs not only luck but also research to make a good decision. As more than 50 initial public offerings enter the market every month, intelligent investors tend to pay attention to several points like business fundamentals, valuations, promoter backgrounds, and comparative analysis. 

Do not ideate on so-called clone companies without searching. Better to follow the list of upcoming IPOs regularly, get news about all IPOs this week, and be aware of how to know IPO allotment status anytime. Remaining proactive and educated will aid you in avoiding blind investments, and thus, you will be able to make wiser plans in the IPO market.

 

FAQs

1. What is IPO allotment, and how does it work?

IPO allotments refer to the allocation of shares to investors once the IPO is over. When the problem is oversubscribed, then there is a chance of you not receiving all of your requested shares.

 

2. What is the way to check the allotment of IPO on the internet?

One can visit the website of the registrar or use the NSE IPO allotment status page using his/her PAN or application ID.

 

3. At what time is the IPO opening?

Bidding in IPO is done between 10.00 and 17.00 hours on trading days.

 

4. What is the best place or list of upcoming IPOs?

Read the financial news to find out about the new IPO list, the list of IPO this week, and the best upcoming IPO options on the NSE/BSE official websites.

 

5. Which one should I invest in, IPOs or SIPs?

They are both used for different purposes. IPOs could be beneficial when it comes to the short-term returns, whereas SIPs tend to provide a long-term increase in wealth. Use calculators such as a Step-Up SIP Calculator to make smart plans.