All you need to know about IPOs.

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As the number of start-ups increase, funding can become a challenge for many. While small start-ups can get through with bootstrapping, larger companies such as Flipkart and Ola Cabs need to look for established sources to raise capital. One such source is to offer an IPO. However, IPOs also require a lot of work, and research on the investors’ part. Instead of just getting swept away in the clamour of upcoming IPOs, investors should take time to properly understand what IPOs are all about.

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What is an IPO?

 

An IPO, or initial public offering, is the first time a company’s stocks go public on the stock market for investors to invest in. it is essentially means the company owners give up part of their ownership to stockholders for the first time. It is one of the easiest, most lucrative way for companies to make profits in the stock market. When a company “goes public”, it signifies that they are on an exciting path of growth and expansion. Smaller, fresher companies usually offer IPOs, as it is a way for them to build on their capital base. However, large, private companies also open their business for public trading by investors to amplify their financial growth. 

 

Types of IPO

·   Fixed price issue: In this process, the company evaluates the assets, liabilities, and every financial aspect they hold. The evaluated figures are then used to fix a price per issue to realize the company’s target gains.

    Book building issue: A relatively new process in India, here the price of a stock is not fixed, but is within a price band. The lowest price in the band is the ‘floor price’ and the highest price is the ‘cap price’. The price band is kept fixed and investors bid for the desired number of shares at the price they would like to pay within the price band. Based on the demand, the price of the shares are decided. 

 

Upcoming IPOs

The following are the upcoming IPOs to look out for in the month of October:

Issuer Company

Issue Open

Issue Close

Offer Price
(Rs.)

Issue
Type

Issue Size (in Cr.)

General Insurance Corporation of India IPO

Oct 11, 2017

Oct 13, 2017

855/- to 912/-

IPO-BB

10,661.85 – 11,372.64

Indian Energy Exchange Ltd IPO

Oct 9, 2017

Oct 11, 2017

1645/- to 1650/-

IPO-BB

997.69 – 1,000.73

MAS Financial Services Ltd IPO

Oct 6, 2017

Oct 10, 2017

456/- to 459/-

IPO-BB

460.04

Godrej Agrovet Limited IPO

Oct 4, 2017

Oct 6, 2017

450/- to 460/-

IPO-BB

1,157.31

 

 

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