An IPO is an Initial Public Offer, in which a company goes public for the first time and sells its shares. Most of the times companies goes public to fulfill their capital requirements for a new project, loan repayment, capital requirement for business enhancement, but sometimes it happens because an anchor investor either wants to take exit from company or reduce his holding in company for some reasons and announces offer for sell for his shares. Reasons may be better opportunities elsewhere or loan repayment or fainted future prospects or he has made good returns from his investment.
Here, the term "Anchor Investor" refers to a person or investment firm who invested in a company before it goes Public. It is a well known fact that most of the good promoters/ Management wants to keep their firm private till it performs well and when they need funds, they prefer pre IPO route. Generally these pre IPO are offered at decent discounts from IPO price and these anchor investors (Big Investors, Mutual Funds, Insurance companies, Investment groups) grabs these opportunities and ripe the fruits of growing business.
Most of the people thinks that to become an Anchor Investor one need huge funds, but its not the picture always. There are brokers/ advisors working in this field of capital raising and arrange pre IPO shares on an investment of as low as Rs.20,000 to Rs.50,000.
However, some negative points of this kind of investment can't be ignored, such as :
(a) You must aware that shares such bought are unlisted, hence even in case of emergency you can't sell till you get an another such investor.
(b) You do not know when /whether company going for IPO or not.
(c) Management /company may fail to perform.
However, most of the time companies do well being a private enterprise. Further, these days IPO's are going oversubscribed and most of the investors do not get allotment at issue price and they have to purchase the same at higher listing price while most of the time these IPO's already comes overvalued.
So, if you research properly, aware of the management, past performance and future prospects of a company just grab the opportunity. You can also use some famous names/websites to make your task easy. You can also contact us @ (+91)7737093555.
Some links of websites working in this field are
1. https://www.planify.in/pre-ipo
2. https://pre-ipo.com/en/
3. https://unlistedzone.com/
4. https://www.ekvity.com/
