To earn heavy returns in the stock market, investors always invest in Initial Public Offerings (IPOs). However, many investors wonder whether they should sell shares on the listing day or hold them for higher profits. This dilemma exists in the minds of investors during both favorable and unfavorable listings. Weak listings result in losses for investors, while profitable listings raise the question of whether the share price can increase further. We will explain, based on expert opinions, what decision to make after a good or bad listing in an IPO.
Gaurang Shah, Senior Vice President of Geojit Financial Services, says that after making profits, IPOs often show profit booking. The investor’s perspective is essential because many people sell shares only after receiving good returns on listing. However, if your goal is not just to earn profits, there are certain factors to consider for better returns. According to Gaurang Shah, the company’s business, future prospects, IPO valuation, and IPO size are crucial factors that determine the future of the shares after the listing. Understand the company’s business before investing anywhere. For example, what the company does and its position in the industry. This explains the future growth of the company, which can have an impact on its earnings and benefit you as an investor.
Gaurang Shah further stated that it is necessary to consider the valuation before applying for an IPO. This means whether the price at which the company is issuing shares is correct. Often, after the listing, the shares of many companies drop by up to 10%. The biggest reason for this is overvaluation. High valuation means that the valuation growth is determined by the price multiplied by the company’s PE (price-earnings) ratio, i.e., how much the company earns. As a result, some companies’ valuations are higher despite considering the possibilities of future earnings. Therefore, it is essential to know about the company and its valuation growth before investing in an IPO.
- Investors always invest in Initial Public Offerings (IPOs) to earn high returns in the stock market.
- Many investors have a dilemma of whether to sell shares on the listing day or hold them for higher profits.
- Investors face losses when the listing is weak, but they also wonder if the share price can increase for higher gains. Should they hold on to the shares for this reason?
- According to experts, it is important to make a decision after a good or bad listing of IPO shares.
- Gaurang Shah, Senior Vice President of Geojit Financial Services, says that after earning profits, IPOs often show profit booking. The investor’s perspective is crucial as many people sell shares only after getting good returns on the listing day. However, if your goal is not just to make a profit, you should consider some factors for good returns.
- According to Gaurang Shah, the company’s business, future prospects, IPO valuation, and IPO size are important factors. These factors determine the future of the company’s shares after listing. Understand the company’s business before investing anywhere. For example, what does the company do and its position in the industry. This explains the future growth of the company, which can also benefit you.
- After listing, the share prices may decline. Gaurang Shah said that it is necessary to consider valuation before applying for an IPO. That is, whether the price at which the company is issuing is correct. Often, after listing, the shares of many companies fall by up to 10%. The biggest reason for this is high valuation.
- High valuation means that the valuation growth is determined based on the price multiplied by the company’s PE, i.e., how much the company earns. Consequently, some companies have higher valuations despite considering future possibilities. Therefore, it is necessary to know about the company and its valuation growth before investing in an IPO.
- News Title: Upcoming IPO on December 5, 2023.
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Disclaimer: This is News Coverage with Opinions of Experts and Should Not Be Taken as Direct Market Buying Tip. Market is always subject to risk. We recommend taking our content as research before investing.
