Why every compnay release IPO in this boom market?

[Avi030]

Hello to all member of traderji. I am new to this forum and want to grab all the basic thing of stock market.I think i am fortunate enough that i will be interacting with the wise knowledge provider in this forum.

Actually i don't understand why most of the company intending to raise finance relese their IPO in this boom market. Is there any relationship between IPO & bull or bear market.

Plese answer me.

 

[ag_fx]

Companies release IPOs in order to take money from the Public. They go to public in order to ask money from them.

Now think from Public's point of view. You as a public, when would you invest in markets? When the markets are falling or when they are rising?

You will invest in an IPO only when you feel the market will return you your investment with some profits. And you would expect that in Bull market and not in Bear market.

And thats why companies prefer to go to markets with IPOs in Bull market as other wise public wont subscribe to their issue and they would not be able to raise money.

 

[Placebo]

Ankit has pretty much answered everything. But before jumping the gun try to understand the need for an IPO. Basically the company is looking for expansion and cannot obtain that with its existing assets so the need for a public issue arises. Do they time it with the bull or bear market ?? Maybe.

In Bull markets companies have an option of charging a high premium on IPO's as compared to a bear market . Higher premium means more money to the company which reflects in the Reserves And Surplus Account of a company.
And more money provides extra flexibility.

Also companies fear that the subscription in a bear market will be below par and there is a distinct chance that the floating cost (the cost incurred for materializing the IPO) would not be covered although that is not the essential aim.

Cheers

 

[Avi030]

Ankit has pretty much answered everything. But before jumping the gun try to understand the need for an IPO. Basically the company is looking for expansion and cannot obtain that with its existing assets so the need for a public issue arises. Do they time it with the bull or bear market ?? Maybe.

In Bull markets companies have an option of charging a high premium on IPO's as compared to a bear market . Higher premium means more money to the company which reflects in the Reserves And Surplus Account of a company.
And more money provides extra flexibility.

Also companies fear that the subscription in a bear market will be below par and there is a distinct chance that the floating cost (the cost incurred for materializing the IPO) would not be covered although that is not the essential aim.

Cheers

Thanks for answering Inangia. It has been very informative and thanks to let me understand the relationship.

 

[Avi030]

Companies release IPOs in order to take money from the Public. They go to public in order to ask money from them.

Now think from Public's point of view. You as a public, when would you invest in markets? When the markets are falling or when they are rising?

You will invest in an IPO only when you feel the market will return you your investment with some profits. And you would expect that in Bull market and not in Bear market.

And thats why companies prefer to go to markets with IPOs in Bull market as other wise public wont subscribe to their issue and they would not be able to raise money.

Thanks Ankit for let me understand this bsic.:clap: