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Summary
- Initial Public Offer, or IPO, allows investors to pick an under-priced company at an early stage.
- For investors, IPO are a big opportunity to buy a company’s shares at an early stage, thereby allowing them to earn more profit.
Initial Public Offer (IPO) is a process by which a private company raises capital by publicly selling its shares to retail investors or institutional investors.
For investors, IPO are a big opportunity to buy a company’s shares at an early stage, thereby allowing them to earn more profit. In addition, IPO also helps in capturing the listing gains. Hence, it is advisable to keep a track of upcoming IPOs.
There are many ways to collect information about an IPO, but whichever source you choose, you must know all the details before investing in an IPO. An investor should check the following information:
- What are the main operations of the company?
- How much capital is the company planning to raise?
- How is the company planning to utilise the raised capital?
- Internal and external risk factors for the company?
- Financials or past performance of the company?
- Who are the directors of the company?
- Who are the promoters of the issue?
How to find out about an IPO
Exchange Websites: Exchange websites are the most reliable source to gather information about an upcoming IPO.
For example, an investor is looking for IPO details of a company that is about to get listed on the London Stock Exchange (LSE), he or she can visit the official website of the London Stock Exchange and there in the news and prices tab, upcoming issues details can be seen.
The details will include information such as the size of the issue, the market in which IPO is about to list, Main or Alternative Investment Market (AIM), the price of the issue and the expected date from when the trading would commence. One can get more details about the company by clicking on the company’s link.
Google Search: On Google, you can type upcoming IPO for a particular exchange for which you are searching the IPOs, and it will show the results.
Whereas, if you just write upcoming IPOs, then Google will show the details of all the IPOs about to list globally. Moreover, along with the upcoming IPO, Google will also show the details like analyst opinion on whether one should subscribe to the IPO or not.
Investment Banks or NOMAD: You can check the details of the IPO or the listing company directly on the website of investment banks or Nominated Advisor (NOMAD).
Investment Banks are a financial services company that assist companies in raising finance on the stock market. They act as underwriters or as the client's agent in the issuance of securities. Sometimes the investment banks take a stake in the company, which is about to get listed, hence they are called Sponsor of the IPO.
This function of assisting companies in raising finance is carried out by a NOMAD in AIM. The AIM is the market on LSE that help small companies to raise capital and go public. NOMAD is mandated to be present if you are looking to list on AIM. NOMAD will conduct a due diligence process to check the requirements for listing and monitor the company for regulatory framework after that.
Also Read: UK Residential REIT to Go Public on LSE, Many IPOs in Pipeline
Apart from these tools to access information, many other paid websites can be used to collect information. Your demat account broker can also help you in accessing the information of upcoming IPOs and advice you whether you should invest or not.
