It is interesting times for India's stock markets as five companies have come up with their initial public offerings this week. These five firms are Tata Technologies, Indian Renewable Energy Development Agency, Fed Bank Financial Services, Flare Writing Industries and Ghar Oil refinery, India. While these IPOs are across sectors today, we are focusing on investors and what they must focus on when approaching IPOs. In general, we are joined by San Mukerjee senior Finance professional and economist and Nais, a managing partner at Flexi Capital. Thank you both for joining us and thank you for your time. Santa first to you. What must investors watch out for when approaching IPOs? In general, I have four points in this, uh, primary, primarily ideologically, what is an IP O? An IP O is when a company, uh, from its authorised capital issues share capital for the public for the retail investors to take part and participate in its, uh, share listing. Right? Uh, if the company has a proven track record of business growth and it's, uh, issuing an IP O for to expand its business, then one has to look definitely at the valuation and the growth prospects. Right? Uh, Unfortunately now nowadays the game has changed considerably because a lot of companies are not issuing IP OS primarily for the motive of expanding business and growth. There are a lot of institutional sellers, So when I say IP O that were broad term is initial public offering, right? So I would actually question what is the initial offering to the public? Because if it's a very large institutional seller, which is completely owned, uh, heavily by the private market before the IP O, then what is actually left on the table for the public at large? Right? So then one has to be very, very careful in terms of valuation. Who are the investment bankers? How is the IPO price? What is actually left on the table when there is a large institutional seller who is selling an IPO? The third point is, if it's a large institutional seller with not even a proven track record of growth or a business model which is viable, then one has to be very, very, very because then all aspects of value growth is literally not there because you do not know how these companies are valued right and who's actually selling to exit first from the private market. And last point would be if a promoter is selling a completely lock, stock and barrel one has to be very, very wary as an investor, because if the promoter does not have the confidence in his own company and is selling lock, stock and barrel and the IPO, the reasoning is not for business. Expansion of growth. One has to be very cautious. All right, so question really? And Nasir your thoughts and what really is a broad definition of a good IP O. Good afternoon. Uh, sin, thank you so much for having me, Uh, see, I think if I completely agree with, uh, sanchita, uh, she's explained what IP U is all about. But I think where what we need to understand is that, uh, the right selection because you've already covered what an IP O is. But I think the right selection is what is really important. I want to bring, uh, all your viewers to a perspective here, Uh, if you go back in time, uh, between january of 2021 in 19, uh, and between 2021 of Jan. Till about April 2021. So those three months, broadly, we saw a lot of IP is coming in, right? There was a massive like we had nazara, uh, we had, uh, is my trip. We had real tell. I mean, the list was endless. Uh, but here again, what we have to kind of pay little attention to was that less than 0% which is 32% of companies. When they got listed, they had less than 0% gains between. You know, companies as high as 26% had gains between 0 to 15%. And, you know, so the selection is very, very important. I think the path to to profitability is something which we need to kind of, uh, really study and know before investing the other very important thing that I want to lay some, uh uh, you know, uh, points on, you know, India is going through a structural tailwind. I mean, you know, we have tailwinds in place for the IPO market. You know, there is stable and pro business government. There is pent up capital demand. You know, there's robust capital supply, strong GDP growth expected, So you know investors ideally, you know, get combined in with this fomo, you know, which is fear of missing out to say, Listen, there are IPO is worth 7000 ks, and maybe we should be investing all in every money. I think the recommendation is very simple. Don't bite off more than what you can chew. You need to understand that stock market brings in itself a lot of volatility. Uh, that's the first point. So, you know, please read the offer document carefully before investing. It's important to know which sector which industry and as Santa said, you know, valuations. I mean, please read up on valuations. It's something called Price to earning bands. We track very, very simple, not not very complicated. Quick point is, do not borrow money for investments. I do not leverage yourself because, you know, we've seen a lot of money in the event. As I just told you, if those IPs get listed and we had a PTM discount, for example, we saw it in way back in 2021. We had a paytm which had a pay TM discount there. After all IP that came after Paytm had a discount. And so you get to lose a lot of capital. Uh, the other one is, you know, there are certain names involved, right? For example, there are big backers. Uh uh is not equal to big returns. What I mean to say is a brand large brands. I don't want to take names, but if they are backing as investment bankers or you know, as merchant bankers, that doesn't necessarily mean that you need to be putting in your money. Uh, so again, a word of caution there, big backers is not equal to big returns. And again, last not the least. Don't fall for the hype. You know, there are a lot of new age businesses coming in the markets, actually, uh, you know, in we've had traditional businesses and now we have new businesses coming in like technology. There's health care, you know, in financial services, we have the big banks. Fintech is coming up in a big way. Our word of you know, question is that you need to do your own risk assessment. Read up on all the offer documents carefully. You need to do a please consult financial experts, because that is something again which will give you enough enough clarity on which, uh, you know, uh, IPs to kind of invest, and we at flexi recommend plans to be patient. A structured approach is a must to time the entry and optimise post listing returns. And last not the least, we recommend not more than 10% of our equity overall equity basket to be invested in IP funds. Broadly. All right, so some very crucial tips there and information as well as advisory for investors, a structured approach must be cautious. Must not follow the trend of the hype blindly. So must consult financial experts if they're not aware of things and details themselves on how to or assess IPOs. So and not just look at sectors and brands broadly. Look at really how a company is performing or the prospects of the given business. So very, very crucial advice there. Thank you both for your time and for this interaction. And, of course, for sharing your insights. Thank you.
