arti.iiitm
Arti Omar
With the economy on the mend, it’s time for more businesses to launch IPOs (initial public offerings) ???
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Go Public or Go Bank ...
- Thread starter arti.iiitm
- Start date
puneet.jaiswal1
Puneet Jaiswal
Pro: The IPO provides cash and equity that accelerate the realization of their vision, and enables the company to continue growing in every aspect of its business from product and employee growth to broader geographies and, of course, increased earnings.
arti.iiitm
Arti Omar
That's true for those companies, can afford public pressure, because IPOs are not like bank borrowing, are totally different. IPOs are the fast way to generate cash but more faster to lose image as well if company is not performing well. So, it should be a more precise decision, because your one wrong move will throw you out from the game. If companies think that they can handle the market ups and downs, can provide some benefits to shareholders that nothing can be good option than IPOs, but if companies are not operationally ready then I will suggest better "GO BANK"
Hi Arti,
It's a very interesting debate on whether a company should "go bank or go public". Out of 1000's of companies listed in our Index, how many of them would you think has utilised the money/capital which they raised through IPO for the purpose's which they had laid down while initiating an IPO. More than 30%u0025 of the companies have done nothing apart from increasing their holdings/stake in the company and pledging their shares(especially mid-caps and small-caps).
IPO is meant for a very different purpose as compared to what a company can achieve by borrowing from a bank.
1) A company can create an effective utilisation of the capacity it has through expansion which requires a lot more capital than what bank provides at a hefty interest rate.
2) Capex plan can be ideally executed with the funds raised through IPO.
3) Market ups and downs will someday rationalise the performance of the company.
In addition to above pro's of IPO, i don't degrade the value of bank borrowing, but then compared to certain important expansion plans of a company, i believe going public is the best way provided you have fulfilled the expectations which you lay down during an IPO. The best eg which comes in my mind is Talwalkar's fitness, who had managed to raise a decent amount from public and have certainly opened a lot more fitness centres in Mumbai and other parts of the country with the help of the public money and in return shareholders have acknowledged the same with the appreciation in the share price.
It's a very interesting debate on whether a company should "go bank or go public". Out of 1000's of companies listed in our Index, how many of them would you think has utilised the money/capital which they raised through IPO for the purpose's which they had laid down while initiating an IPO. More than 30%u0025 of the companies have done nothing apart from increasing their holdings/stake in the company and pledging their shares(especially mid-caps and small-caps).
IPO is meant for a very different purpose as compared to what a company can achieve by borrowing from a bank.
1) A company can create an effective utilisation of the capacity it has through expansion which requires a lot more capital than what bank provides at a hefty interest rate.
2) Capex plan can be ideally executed with the funds raised through IPO.
3) Market ups and downs will someday rationalise the performance of the company.
In addition to above pro's of IPO, i don't degrade the value of bank borrowing, but then compared to certain important expansion plans of a company, i believe going public is the best way provided you have fulfilled the expectations which you lay down during an IPO. The best eg which comes in my mind is Talwalkar's fitness, who had managed to raise a decent amount from public and have certainly opened a lot more fitness centres in Mumbai and other parts of the country with the help of the public money and in return shareholders have acknowledged the same with the appreciation in the share price.
Hi Arti,
It's a very interesting debate on whether a company should "go bank or go public". Out of 1000's of companies listed in our Index, how many of them would you think has utilised the money/capital which they raised through IPO for the purpose's which they had laid down while initiating an IPO. More than 30% of the companies have done nothing apart from increasing their holdings/stake in the company and pledging their shares(especially mid-caps and small-caps).
IPO is meant for a very different purpose as compared to what a company can achieve by borrowing from a bank.
1) A company can create an effective utilisation of the capacity it has through expansion which requires a lot more capital than what bank provides at a hefty interest rate.
2) Capex plan can be ideally executed with the funds raised through IPO.
3) Market ups and downs will someday rationalise the performance of the company.
In addition to above pro's of IPO, i don't degrade the value of bank borrowing, but then compared to certain important expansion plans of a company, i believe going public is the best way provided you have fulfilled the expectations which you lay down during an IPO. The best eg which comes in my mind is Talwalkar's fitness, who had managed to raise a decent amount from public and have certainly opened a lot more fitness centres in Mumbai and other parts of the country with the help of the public money and in return shareholders have acknowledged the same with the appreciation in the share price.
It's a very interesting debate on whether a company should "go bank or go public". Out of 1000's of companies listed in our Index, how many of them would you think has utilised the money/capital which they raised through IPO for the purpose's which they had laid down while initiating an IPO. More than 30% of the companies have done nothing apart from increasing their holdings/stake in the company and pledging their shares(especially mid-caps and small-caps).
IPO is meant for a very different purpose as compared to what a company can achieve by borrowing from a bank.
1) A company can create an effective utilisation of the capacity it has through expansion which requires a lot more capital than what bank provides at a hefty interest rate.
2) Capex plan can be ideally executed with the funds raised through IPO.
3) Market ups and downs will someday rationalise the performance of the company.
In addition to above pro's of IPO, i don't degrade the value of bank borrowing, but then compared to certain important expansion plans of a company, i believe going public is the best way provided you have fulfilled the expectations which you lay down during an IPO. The best eg which comes in my mind is Talwalkar's fitness, who had managed to raise a decent amount from public and have certainly opened a lot more fitness centres in Mumbai and other parts of the country with the help of the public money and in return shareholders have acknowledged the same with the appreciation in the share price.
arti.iiitm
Arti Omar
I am agree, that if companies are offering IPO then they should ready to meet all the promises they made to public.
puneet.jaiswal1
Puneet Jaiswal
Nice Info Kulin & i agree with you.