Startup Season 4 Updates - Startups Don't Rush For Ipo, Big Names Like Zomato, Paytm, Mobikwik Don't Guarantee Good Returns_Pic Credit Google

Startup Season 4 Updates – Don’t Rush For Startups Ipo, Big Names Like Zomato, Paytm, Mobikwik Don’t Guarantee Good Returns

Startup Season 4 Updates – Don’t Rush For Startups Ipo, Big Names Like Zomato, Paytm, Mobikwik Don’t Guarantee Good Returns – Startups like Zomato, Paytm or Mobikwik are launching IPOs for the first time within the country. aside from this, companies like Flipkart and Ola also are in line to bring IPO. This has created curiosity among investors. But as an investor, you ought to avoid rushing for it.

Startup Season 4 Updates – Don’t Rush For Startups Ipo, Big Names Like Zomato, Paytm, Mobikwik Don’t Guarantee Good Returns

Recently IPO of startups like Zomato came and it also got tremendous response from the market. Its IPO was subscribed 40 times more. But experts ask to require these precautions before investing during a startup’s IPO.

Tanushree Banerjee, Research Co-Head, Equitymaster, says that it’s an honest thing that investors are showing interest within the IPO of startups like Zomato. But retail investors should confine mind that the risks involved are different from past market experiences.

Be it Zomato or Paytm and Mobikwik, big names cannot guarantee to offer you good returns always. You remember Reliance Power’s IPO in 2008, when it had been fully subscribed within the primary minute of IPO opening.

Reliance Power’s IPO was in great demand among retail investors. the corporate had fixed the upper band issue price of Rs 430 for this and it got a good boost on listing. But that’s the day and now’s the day its stock has not gone above the listing price till date and it’s currently at Rs 13 per share.

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While investing in IPOs of companies doing traditional business, the investor has the info of profit and record . But most of the tech unicorn companies within the country are trading in losses and their main source of funding is their valuation.

If we mention Zomato itself, then within the last three years its loss has been quite Rs 4,000 crore. However, the company’s revenue has increased by 50%. If we expect from the longer term point of view, then revenue growth is more important, but the danger of loss still remains.

It is not that those investing in tech startups don’t know this. Everyone knows that new companies put money within the market within the beginning and investors actually invest money by watching their growth projections and high-valuations. This strategy has worked within the case of Facebook, Alibaba, Amazon and even Twitter.

Tanushree Banerjee says that each one these startup companies did tons of loss within the beginning, but grew rapidly, but later all became profitable companies. But running at a loss like this for a unicorn startup can drag on for several years. therein case, the patience of retail investors are often the solution .

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