Moneypalm was setup by a group of Extremely well known, top level professionals in the broking industry, with a vision to completely change the rules of brokerage industry by providing a platform which is more customer centric and highly economical. The Group is headed by Mr. Nirdosh Gaur, who is one of the most reputed and respected names in the Indian Stock Broking Industry.

1. How to pick good IPOs and avoid bad ones
Just a week back I was talking to an acquaintance and he expected a few stock market tips from me.
He also told me that he prefers to invest in IPOs (Initial Public Offerings) instead of the secondary
market as they are much safer. So just out of curiosity, I asked him, how he selects the right IPO to
invest in. I got a funny answer. He said he invests in any IPO which is much hyped or is which has
been advised by his friends or colleagues. Well I found it really saddening that people invest in
IPOs based on what others recommend instead of researching themselves, and then call IPOs much
safer than the secondary markets. But this is the irony of the Stock Market. People follow each
other without researching themselves. I knew it happened in secondary market, but never expected
that it’s the same case for IPOs too.
So today I will just stress on a couple of points that a person should focus on before investing in an
IPO. You should thoroughly evaluate the below given points before investing in the IPOs. These
will help you in picking the Good IPOs and avoiding the not so good ones.
1. Evaluate if the company is stable or not: The company’s prospectus for the IPO will show
how much revenue and earnings the company has generated over the past couple of years.
Always see if the company is making adequate profits or not.
2. Check if the management has a Stake in the company or not: Check the company’s
prospectus and determine the stake, the management carries in the company. It’s always
considered beneficial if the management holds a large stake in the company. In majority of
cases, this is a sign that the top management still believes in the company’s future.
3. Understand the reason to generate funds through the IPO: The Company’s prospectus will
state what the company will do with the funds generated through the IPOs. If the funds are

2. raised for the expansion of the business, it will be good for the company and your
investment.
4. Understand how the sector is performing: Always analyse the growth potential of the
sector also along with the company. A sector which does not offer much growth, should be
avoided.
Even if we take care of all the points mentioned above, there is no surety that the IPO will do great.
Remember it’s a myth that IPOs are safer than the secondary market. Infact in can me more risky
since you hardly know anything about the company. Always use your able judgement and try to
rationalise if the IPO can be beneficial or not. And always remember there is no better friend in this
market that your own wisdom and efforts that you put in to gain knowledge. For that, we are always
there to guide and assist you since we at Moneypalm firmly believe – Together We Grow
Have a happy time investing friends. God bless you all.