Why you should invest in IPO in 2021?

Introduction

The initial public offering (IPO) refers to the method of providing a new stock issue of shares of a private company to the public. The issuing of public shares helps a corporation to collect public investor funds. The move from a private to a public corporation will provide private investors with a considerable period to make maximum profit from their investment, as it usually requires share subsidies for established private investors. Meanwhile, public buyers are still permitted to take part in the bid. IPO is one of the most common and profitable alternative for investment in Stock Market.

Advantages of Investment in IPO:

• One will reach a company’s ‘bottom floor’ with strong growth opportunities by investing in an IPO. In a short time, an IPO can be the window for fast gains. In the long term, it will also help grow the money.
• Imagine investing in a new startup offering innovative technologies. You’d also benefit from its popularity if it were to influence the market and rake money.
• Investing in IPOs is equity Investment. They therefore have the opportunity for long-term high returns. Onecan accomplish long-term finance targets such as retirement or house acquisitions from the investment they have.
• Moreover, Indian IPO industry is growing at a very large scale. In 2017 there was almost $11 billion in the Indian capital exchange.

Upcoming IPO in 2021

Calendar year 2021 is all set to introduce various initial public offerings, as the collection of funds from public roads gains momentum. The list of the Upcoming IPO’s in 2021 is already launched. Here are the details of Upcoming IPO of 2021 which will lead to great investment in 2021:

1. Indian Railway Finance Corporation (IRFC):IRFC mainly covers the development or acquisition of assets for Indian Railways and any other undertaking/entity of the Railways Department. The IPO size is set to be 4600 crores
2. Kalyan Jewelers: The Jewelry brand based in Kerala; Kalyan Jewelers aims to raise to Rs 1,750 crore through its IPO.
3. Suryoday Small Finance Bank: Suryoday Small Finance Bank set to launch a 2-crore share IPO, comprising of a new 1.6-crore share and the remainder of these are offered for sale.
4. Laxmi Organic Industries: The IPO size is about Rs 800 crore out of which the fresh issueis for Rs 500 crore and the remainder is offer for sale.
5. Indigo Paints: The issue is estimated to be around Rs 1,000 crore, the fresh issue from which is 300 and the remainder is offer for sale.
6. Craftsman Automation: The IPO is set to raise Rs 150 crores issue and has an offer for sale of 45.21 lakh shares.
7. Barbecue Nation:  Barbecue Nation, the leading restaurant chain in various urban areas, aims to lift Rs 1,000-1,200 cruises through its IPO problem.The hotel chain will raise Rs. 1000 crore out of which 400 crores are fresh issue and the remainder is offer for sale.
8. Home First Finance Corporation:Home First is planning to raise Rs 1500 crores which includes 400 crores as fresh issue and the remainder is offer for sale.
9. Shyam Steel:The IPO is roughly Rs 500 crores, which is a mix of revenue and new subjects.
10. Annai Infra Developers: The Annai Infra Developers IPO is set to raise 200-250 crores through its Initial Public Offering.

Which upcoming IPO is best to buy?

LIC is most likely to be considered as the best upcoming IPO of 2021 which will lead to great investment in 2021 since it will be India’s biggest public issue ever. In the 2020 EU Budget, Nirmala Sitharaman, Minister of Finance, declared the divestment in LIC. Even though the government has not announced the issue size of the IPO, it is estimated to be Rs 70,000–80,000 crores. The state had Rs 2.1 lakh crore divestiture goal, which included Rs 90,000 crores from the LIC listing and the IDBI stake sales. Recently, Milliman Advisors LLP India is chosen by the Department of Investment and Public Asset Management (Dipam) to find LIC’s advanced worth before the IPO.

Latest IPO’s of 2020

In 2020 there were at least 15 corporations that went public and approximately Rs. 25,000 crores were raised with the help of these IPO’s. In 2020, several IPOs floated in the second half of the year, as secondary market sentiment strengthened after March following the flash crash.

Here is the list of latest IPO’s of 2020 which ruled the market by their bumper listings:

1. Mrs. Bector’s Food Specialities: Mrs. Bector’s Food Specialities IPO received the highest subscription with 198 times from the issue. The IPO price was Rs. 288 per share and the share got listed at a price of Rs. 501.
2. Happiest Minds Technologies Ltd:Happiest Minds Ltd is a Bangalore-based IT service provider firm, which was established in 2011 in the name of “Born Digital. Born Agile”. The share was oversubscribed by 150 times. The IPO price was Rs. 166 per share and the share was opened on Rs. 351 per share.
3. Burger King India Limited IPO: Burger King is the most rapidly expanding restaurant services chain in India. The issue was oversubscribed by 156 times. The IPO price of the share was Rs. 60 per share and it got listed at Rs. 115 per share
4. ChemconSpeciality Chemicals: Chemcon Specialty Chemicals Ltd was founded in 1988 and is a supplier of specialty chemicals. The issue was oversubscribed by 149 times, the IPO price was set to be Rs. 340 and the share got listed at Rs. 730
5. Mazagon Dock Shipbuilders Limited: Mazagon Dock is the leading Indian civil defense shipyard under the Ministry of Defence, and was incorporated in 1934.The issue was oversubscribed by 157 times, the IPO price was set to be Rs.145 and the share got listed at Rs.216 per share.

Why do stock prices increase after IPO?

It is not always true that the share prices will only increase after the listing in the secondary market, it depends on various fundamental and technical factors of the company. But majority of times, we will see that the prices are likely to go up at least on the day of listing. A probable reason why the prices are likely to go up is the demand supply law. In IPOs the supply remains the same but the market for the same quantity of shares is massive and therefore people continue to pay more and more premium on the stock they purchase. This is therefore the case for a massive premium as an IPO lists the stock exchange. The IPO ‘Pop’ is known as this.

Should you buy an IPO or wait?

Whether to invest or not in an IPO is a question of subjectivity. It depends on person and his goals. IPOs tend to receive a lot of coverage from the newspapers, some of which the organization willfully cultivate. IPOs are usually common with investors because, on and soon after the day of the IPO, they appear to generate unpredictable price moves. This can also lead to substantial gains, but it can sometimes lead to big losses. Finally, each IPO should be judged by the investor based on the company’s prospectus and its financial conditions as well as risk perception.

What is the Process of Investing in an IPO

Investment in IPO is now very simple and you can directly invest through net banking or UPI service with the help of your demat account. Here is the process of Investing in an IPO online:

OPEN DEMAT ACCOUNT WITH Zerodha To Invest In IPO

• Choose the IPO That you Want to Invest in: You must decide which IPO you want to invest in before you learn how to purchase an IPO. In 2020, approximately 40-50 businesses are projected to initiate IPOs and collect funds for the Rs.40000-50000 crisis range. Therefore, it is essential to establish the IPO that you want to invest in.
• Open the Required Accounts: We need to open the following accounts.
• Demat Account: to store the shares in electronic form
• Bank Account: to make the payment for the shares you have applied
• Follow the application process:
• Sign in and pick the IPO in which you plan to invest.
• Enter the price for shares and the number of lots you want to apply for
• Enter your UPI ID and Initiate the Transaction.
• You will receive a payment request in your UPI Mandate Dashboard within the same day usually.
• Accept the request in your UPI account (Bank or third party app) to complete transaction.
• After you accept request fund will be blocked in your account until you received shares.