What Are Pre-IPO Stocks, and Are They Worth It?

What Are Pre-IPO Stocks, and Are They Worth It? What is Pre IPO? Pre IPO is produced by Planify which brings "Private Equity for Retail investors".

One can invest in companies before they get listed on the stock market.

Why invest in Pre IPO? When was the last time you invested money in a good IPO and got shares worth more than 50,000 Rs. Probably one needs to run the time back to get an answer.

Understanding the Pre-IPO Placement From the perspective of a young company, a pre-IPO placement is a way to raise money before going public. It also is a way to offset the risk that the IPO price will prove to be optimistic, and the price will not go up immediately after it opens.

Moreover and often, investors in these private sales are institutional investors and help the company with governance matters and getting institutionalized before going IPO. From the buyer's perspective, the amount per share may be discounted from the expected IPO price, but there is no way to know the price per share that the market will actually pay.

In fact, the purchase is typically made without a prospectus and with no guarantee that the public listing will occur.

Low Allotments Good IPO in India does get oversubscribed by 30x-50x. Retail investors hardly get shares before listing. Post listing, pricing generally gets overvalued most of the time.

Invest in Growth As more and more companies choose to stay private longer, Retail misses on the ultra growth stage of a company. Valuations of private companies rise multi-fold before listing. You get to ride the wave.

Big Private Equity Success for any new startup is measured when they are able to go public. Retail investors can only put a max. of 2 Lac Rs. application whereas they have far more money to invest. Private Equity in India starts at 2 crores. That is already a big difference of 2 Lac vs 2 crores.

Pre IPOs Done Earlier

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