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Mega IPO rush: Dos and don’ts while investing in IPO

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The mega consumer tech initial public offering (IPO) boom has kicked off, and retail investors don’t want to miss out on the action. With all the excitement and hype, it is important to go back to PF and investing basics.

This week on CNBC-TV18’s special show Money Money Money, Nasser Salim, Managing Partner, FlexiCapital, Ramesh Mantri, Senior Investment Analyst, White Oak Capital and Nimesh Kampani, Let’sVenture discussed the basic question – how to evaluate a loss-making internet tech company and the dos and don’ts to keep in mind while investing in some of the upcoming high profile tech IPOs.

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Key factors to look at while investing in IPOs

Valuation: See how the valuation of the company fares as compared to existing companies in the same industry. You can employ techniques like price to earnings ratio, price to book ratio and return on equity judge better.

Investment objectives: If you have been following the sector and the company’s growth closely and truly believe in the potential of the company based on the fundamental analysis, should you consider investing in the IPO.

Research: You must conduct thorough research and find as much as you can about the company, its promoters, financing, competitors, media coverage, and how well its industry is faring at large. In other words, make your research as in-depth as possible if you wish to make decent returns in an IPO.

For the entire show, watch the accompanying video.

(Edited by : Aditi Gautam)

First Published: Jul 14, 2021, 05:20 PM IST