pre-ipo-investing - Unlisted Investments
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Introducing pre-ipo investing opportunity!

Welcome to the world of high returns and high patience! Yes, you read it right, the world of unlisted investments in stocks or also popularly known as investments in pre-ipo shares, is one which provides high returns often called as multi-bagger returns and it also needs a lot of patience.

Often investors invest in a growing phase where the company undertakes expansion and the results of the growth often accrue after a few years. This has been the golden rule of thumb to gather multi-bagger returns. A company often approaches the capital markets in the form of issuing IPO and thereby listing the firm on the stock exchanges. Once these shares are listed, they then stop being unlisted or pre-ipo shares and becomes listed shares. Often at this stage, many investors look at the performance of the company and many analysts start tracking the growth of the company. Suddenly the company finds that its share price starts increasing because a lot of investors are now interested in investing in the company partly due to it getting noticed and partly due to increasing liquidity of the stocks.

Hence to find higher return on investment, a smart investor should try to invest before other investors invest and before the valuation of the company grows. This is something often done by private equity investors and hedge funds. This is an opportunity between the two worlds. Before it gets crowded while after the company has been proven winner and survived its initial years of struggle because the failure rate of startups is as high as 9 out of 10. Thus pre-ipo investing is a safer and more rewarding way of investing and accelerating the rate of return.

Often a common question asked by new investors is, how much can a person earn by investing at pre-ipo stage. While there is no fixed guarantee of any specific return and the return too depends on the price at which an investor buys and the time when the investor exits. It will be unwise to put a number to it because in the past, people have made multiple times returns which can go as high as 3 times to 10 times the amount invested but to be realistic, one should aim for a return that is better than the index returns. Over a long-term investment in index, one can often earn 15% p.a. so an investor investing in pre-ipo markets should aim for around 20%-25% p.a. return. Investing in pre-ipo markets is more like value investing where an investor invests because the business is undervalued or available at cheap valuations due to lack of liquidity of trading the equity shares. The investor gains after the IPO has been out and the value has been unlocked or very near but prior to the IPO.

To educate yourself more about regulations involved in pre-ipo markets, browse through our knowledge center and find out the important things you should be aware of. Additionally, if you want to know top mistakes people can make while investing in pre-ipo market or advantages of investing in pre-ipo shares then feel free to browse through our knowledge centre for more information.