By: Hem - 07-Apr-2022

Which IPO is the best to buy today in India?

An IPO is a procedure of selling shares of a private company to the general public in the form of new stock issuance. An IPO allows a company to conduct fundraising from the general public. It is because the transition from a private to a public firm often involves a share value for current private investors. It might be crucial for private investors to realise rewards from their investment ultimately. In the meantime, it allows public members to invest in the offering. As per reports, a total number of 1,821 IPOs have come out into existence globally. Of these, 106 have started to grow in India. The Indian IPO market is distinct not just in terms of the numbers but also in terms of the massive quantity of engagement from retail investors. It has been noticed that in the financial year in 2021, about 14.2 fresh investors have participated in the IPO market. For a newbie, investing in IPO looks extremely promising. 

Since the Indian IPO market is growing, individuals are willing to buy more IPOs in India. Before purchasing an IPO, you should understand its business well and see its position at NSE or BSE. Service providers like Hem Securities help with good reviews and essential decision-making regarding IPOs in India. Today, Adani Wilmar Limited is an example of the most profitable IPO in India. Let’s look into the company’s performance in detail. 

Adani Wilmar Limited 

Adani Wilmar Limited is an Indian fast-moving consumer goods (FMCG) company. It provides primary kitchen commodities to Indian consumers. It includes rice, wheat, flour, pulses, edible oil and sugar. The product offering is divided into packaged food and FMCG, edible oil, and industry essentials. As per the stock market data, Adani Wilmar Limited has an issue price of 230. Its current price at BSE (Bombay Stock Exchange) is 379.7 and at NSE (National Stock Exchange) is 379.8. Moreover, the company has an IPO gain of 65.09%. It makes Adani Wilmar Limited a top IPO to invest in, in India. 

Here is a table for you to follow up on the essentials. 

Company NameListing DateIssue Price (Rs.)Current Price at BSE (Rs.)Current Price at NSE (Rs.)Gain (%)
Adani Wilmar LimitedFeb 08, 2022,230379.7379.865.09

Though investing in IPO in India is profitable, this one also comes with risks like any other investment. However, if you consider the following factors, you can double down your investment. 

Points to remember before investing in an IPO

Here are specific points that you must remember:

Define your objectives

It is critical to clarify your objectives before investing in an IPO. Some IPOs might provide significant listing profits, while others may initially list at a discount but can be a fantastic selection for a long-term portfolio. It is impossible to forecast whether an IPO will list at a gain or a discount. Many things determine it. However, if you are a first-time investor, it is always wiser to invest for the long run. It will assist you in surviving the instability in the near run.

Understand the business

It is advisable not to invest in a business you don’t understand. There are several sources of information for a publicly traded corporation. However, for a firm that has not yet gone public, the draft red herring prospectus (DRHP) is a treasure mine of information. You can determine a company’s strengths, prospects, and hazards by reviewing the DRHP. You can also predict how the firm will fare in the medium and long term. 

How is the company going to use the funds 

Every firm must explain why it is planning an IPO and how the cash will be used. This information may be found in DRHP under the ‘Objects of the Issue’ section. The firm will describe how they intend to spend the cash in this section.

Check the company’s financials

It is the most crucial part of any business. The financial statements show how much money the business generates, how much it spends, and how much profit it earns. A prosperous firm is more likely to survive in the long run than a loss-making one. If a company’s financial picture is solid, its stock will do well on the stock market. 

Company valuations

It is the company’s worth. A corporation engages specialists to determine the worth of its business based on performance and other considerations. There is a notion in value investing known as inherent value or genuine value. This metric determines a company’s true worth. You may decide if the IPO is overpriced or underpriced based on its intrinsic worth. A stock that is undervalued indicates that the market underappreciates it. In other words, the company’s stock is selling at a discount to its true worth. This suggests the stock has a high potential for growth or upside and a low danger of a downturn. It is preferable to invest in an undervalued company since it provides investors with a margin of safety.

Management Background

It is critical to investigate the background of the persons in charge of the firm. The company’s major pillars are its promoters and management. They will be the ones that propel the organisation ahead. A company with a competent management team has a greater chance of future success. Take Adani Wilmar Limited, for example. The company has a strong management team that adheres to appropriate corporate governance procedures. The same may be observed in the company’s ever-increasing share price. 
Hence, before investing in IPOs consider the above-mentioned factors as a beginner. Also, now that you know an IPO with good gains, consider investing in the same or other Indian IPOs with Hem Securities. It is an online trading platform providing extensive IPO related services. At Hem Securities, you can avail of IPO research and a complete IPO Review and make an informed decision before investing. Furthermore, this online brokerage house allows investors, both professionals and freshers, to proceed with paperless applications, E-IPO and in-depth IPO analysis. Besides IPO Services, Hem Securities is also known to offer a plethora of services like investment banking, Algo trading, broking & depository.


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