IPO Look Before You Apply
Indian Economy & Market|July 2021
Many people have started feeling that the IPO market (initial Public Offer) has become a lottery market nowdays.
IPO Look Before You Apply

And some people have even opened more than one demat account to apply for IPO. But it has always been like that since the number of market participants started increasing. Demand and supply will always play a role. However the Primary Market is the backbone of the stock market. No denying the fact.

In fact, investors must understand the basics. Investing in the IPO is more or less like an arranged marriage. And like the real marriage, here again are five parties: In-laws – Promoters; Bride – Company; Brahmin– Book building bankers; Other relatives – Broker; Dowry – Retail discount. As the in-laws know everything about the product they are on the sell-side and aware of SWOT of the product. Investors are given a beautiful pitch by the Brahmin and given a day or two to observe the product. They will keep them motivated by all tricks in the trade. The deal is made sweeter by adding some dowry to it in the form of Retail discount. The value of a product lies in the eyes of a buyer. For seller, there is only one value proposition, which is to get the maximum price. The buyer has to find if they need the product or not.

So an investor must keep in mind the following points before applying for an IPO

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