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Research before Investing in IPO

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  Research before Investing in IPO Before investing in IPOs, make sure you are familiar with their growth prospects and associated risk It is wise for investors to take enough precautions while investing in IPOs as at times such investment could be riskier than assumed. Here are 5 precautionary measures one should undertake while putting in money in IPOs 1. Carefully read the DHRP of the company The Draft Red Herring Prospectus (DRHP) of a new entity offers a detailed insight into the company that is coming with an IPO. It provides critical information that can help you understand the business better. 2. Know the Promoters Promoters are the driving force of the company. The growth of the company largely depends upon the promoter's ability to make the right decisions. 3. Know about the Risk Factors Risk factors mentioned in DRHP must be given attention. It is better to avoid investing in IPOs if it does not match your risk appetite. 4. Objective of Capital Raised It must be taken in