Benefits Of Investing in IPO in India | Motilal Oswal

Benefits Of Investing in IPO in India

In the close-knit community of investors in India, there is a lot of talk about IPO investments doing the rounds. An IPO, or Initial Public Offering, occurs when a privately-held company offers its shares to the public for the very first time. When a company is privately established, shares are held by its owners primarily, and any other close family and friends. Additionally, some stake in the company may be held by interested invested parties like financiers or venture capitalists. 

 

Why Investors Invest

IPOs are appealing to most investors because they believe that share prices offered in an IPO are low, and if the company has growth potential, good returns can be expected out of such investments. In fact, among the majority of investors it is a common belief that share prices rise after an IPO is offered. This is among the key IPO benefits that investors think they will receive. This is especially so if the shares of the company whose IPO is being offered is an established and potentially strong company. For instance, the upcoming IPO of LIC, delayed many times over and now touted to be offered by April 2022, has garnered a lot of excitement and many are in the fray for allotment. Obviously, investors have done their research well and LIC shares will be potentially those which will see a decent amount of growth as this company’s financial history tells us. 

IPO Advantages

Any upcoming IPO prompts a whole lot of attention as investors are waiting to make good investment decisions through which they are sure they will benefit from good returns. Here are the key advantages of investing in an IPO, including clear perks you get with investment:

  • Investors can bid for particular amounts of shares they would like, based on their investment capital.
  • Once IPO shares are allotted, investors become active shareholders of the company.
  • According to funds invested in IPOs, investors have the right to receive dividends and bonus stocks when the company offers these in the future. 
  • Based on historical data, equity from IPOs has generated larger returns relative to other classes of assets.
  • IPO application is an easy process and it is possible to apply online with a broker that has an online platform. 
  • Among IPO benefits, is the perk of allotment of shares from a reputed company that has a good chance of growth in the future. 
  • IPO stock prices are kept low initially, and this is so because the price of the stock is expected to increase after all allotment is completed. In this way, investors can invest a substantial amount of funds in a reputed company’s IPO, and see great returns in the long term. 
  • If you are an investor who wishes to diversify their portfolio, IPO investment is a secure way to allocate your funds in a variegated way. 

Get IPO Benefits

In case you wish to be allotted shares of any upcoming IPO, such as the much-sought after LIC IPO, you can easily do so after you open a Demat account which will hold your allotted shares. This is possible on the website of Motilal Oswal, a broker that is reliable and has the means to educate you further about your investments. The main reason to invest in an IPO is to own shares of a company that has reliable growth potential with affordable share prices offered in the IPO.

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account | Upcoming IPO | LIC IPO

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