Trading Aspirants

What is a share? The capital of a company is divided into shares. Each share stands for a unit of ownership. These shares are offered for sale when an organization needs to raise funds. An Initial Public Offering means that a company is making a portion available for traders or investors to buy. Companies benefit from this exercise as they receive the required funds for different purposes. Here are the reasons why people invest in share market: Wealth Creation Future Opportunities to own Portfolio diversity Minimizing loss Easily accessible money Combating risks Added benefit of dividends

Types of IPO: Fixed Price Issue Book Building Issue The issues differ on these factors which are tabled as below. Fixed Price Issue Book Building Issue   Pricing   The Share Price Is Fixed On The First Day Of Issue And Is Printed In The Order Document.   The Exact Share Price Isn’t Fixed. Only The Price Band Is Fixed. The Price Is Fixed After The Closing Date Of The Bid.   Demand   It Is Known Only After The Close Of Issue.   It Can Be Known Every Day.   Payment  The Payment Should Be Done 100% In Advance. Refund Is Given After The Allocation.  The Payment Can Be Made After The Allocation.   Reservations  50% Of The Allocations Are Reserved For Investments Below 2 Lakhs, And The Rest For High Amount Investors.  50% Of Allocations Are Reserved For The QIBs. 35% For Small Investors And The Rest To Other Categories Of Investors.

Technically speaking, any adult who is competent to enter into a legal contract is eligible to apply in the IPO of a company. Of course, it is essential that you have a PAN card issued by the Income Tax department and you also have a valid d emat account. Remember, having a trading account is not necessary in case of IPOs, a demat account alone is sufficient. However, if you want to sell the shares on listing then trading account will be required. That is why brokers will advise you to open a trading account along with demat account when you apply for an IPO for the first time. An important point to be remembered here! When you apply for an IPO, it is not an offer but an invitation to offer. Only when the IPO issuer offers you shares, it amounts to an offer.

If you have bought an IPO for the company, you are exposed to the fortunes of that company. You bear a direct impact on its success and loss It is this asset of your portfolio which has the highest potential to reward the returns. On the flip side, it can sink your investment without a sign. Remember stocks are subjected to the volatility of the markets You should know that a company which offers its shares to the public is not indebted to reimburse the capital to the public investors You should weigh up your potential risks and rewards before investing in an IPO. If you are a novice, read up an account from an expert or a wealth management firm. If still in doubt, talk to your personal financial adviser.                                                                              💹Angel Broking🌐

Offering an IPO is a money-making exercise. Every company needs money, it may be to expand, to improve their business, to better the infrastructure, to repay loans, etc Trading stocks in the open market mean increased liquidity. It opens door to employee stock ownership plans like stock options and other compensation plans, which attracts the talents in the cream layer A company going public means that the brand has gained enough success to get its name flashed in the stock exchanges. It is a matter of credibility and pride to any company In a demanding market, a public company can always issue more stocks. This will pave the way to acquisitions and mergers as the stocks can be issued as a part of the deal.                                                                💹Angel Broking🌐

IPO means  Initial Public Offering. It is a process by which a privately held company becomes a publicly traded company by offering its shares to the public for the first time. A private company, that has a handful of shareholders, shares the ownership by going public by trading its shares. Through the IPO, the company gets its name listed on the stock exchange. A company before it becomes public hires an investment bank to handle the IPO. The investment bank and the company work out the financial details of the IPO in the underwriting agreement. Later, along with the underwriting agreement, they file the registration statement with SEC. SEC scrutinizes the disclosed information and if found right, it allows a date to announce the IPO.                                       💹Angel Broking🌐

Companies typically go public to raise huge amount of capital in exchange for securities. Once a private company is convinced about the need to become a public company, it kick-starts the  process of IPO.  Companies which want to go public follow a process that exchanges adhere to.   The  IPO process is quite complicated.  So, what are steps to tread to make an initial public offer? One should note that the entire IPO process is regulated by the ‘Securities and Exchange Board of India (SEBI)’.  This is to check the likelihood of a scam and protect investor interest.  Step 1: Hire an investment bank Step 2: Register with SEC Step 3: Draft the Red Herring document Step 4: Go on road show Step 5: IPO is priced Step 6: Available to public Step 7: Going through with the IPO                                                💹Angel Broking 🌐

Companies go public to raise money. It gives them financial capital, that they can use to clear off debts, improve the infrastructure, invest in research and development of new products, introduce new products and so on. Apart from that, the increased financial scrutiny during the process of going public will get them better debt rates when they are issuing it. And if the company’s stocks are in demand, there is always scope for mergers and acquisitions. The terms of negotiations can be in stocks. The demand also attracts the company’s top talents as the company can offer stock options as reimbursement. The company gets credibility and visibility after it gets listed on the stock exchange.                                                                                                               💹Angel Broking🔮