An Alternative Source of Investment: Pre IPO Shares

Pre IPO shares in India; this concept has come to our notice along with the concept of alternative sources of investments that is being talked about so much. These IPO shares are said to be one of the wisest and most effective alternatives that has surfaces in recent times and can help in bringing in a lot of changes intended to if only we understand how it helps and where it functions.

Most of these alternative investment assets that are being discussed about are in the charge of institutional investors or at times even go through accreditation, other than that there are also in the grip of individuals with immense net worth due to the complicated natures and the limited set of regulation of the investments in conversation.

There are various possibilities that can help to buy pre IPO shares in India to begin with. You can either acquire certain shares that are already present with the withstanding shareholders or you can opt for becoming an anchor investor as it is know that these kinds of investors are granted shares before IPO. The last option that can also be considered for the same is that you indulge in a negotiation with the management so that you are assigned with a new allotment of purchase from the existing stakeholders of the company before the company goes for IPO.

Let us have a look how unlisted equities can help you further in this process:

• A PROPER WAY OF BRINGING IN A DIVERSIFICATION IN YOUR PORTFOLIO

The most basic first step that you need to learn and understand carefully regarding a long term spread of portfolio appreciation is that asset allocation is the beginning of it. By including the process of addition of uncorrelated securities you bring in a good amount of reduction in the occurrence of an overall risk factor in the concerned investment portfolio. You will be surprised to know that these unlisted equities have an unimaginably low price correlation with that of the listed ones. That is the reason why the unlisted equities will help in reducing the risks in the portfolio.

• A WAY OF GETTING SUPERIOR RETURNS ON YOUR PROSPECTS

You would have wanted to know how certain young and newly arrived companies see a much higher and faster growth than companies who have been in the similar business over a long period of time. This happens because of the lower base that the newer companies build and therefore they are usually seen very successfully outshining the benchmark returns so to say. Saying that, you would also like to make a note of the fact that, a lot of this talked about growth takes place a long time before the company decides to go more public with an IPO. Thus having a role to play with such companies in the growth or you can say the pre IPO stage can help in bringing much more superior returns to the investors.

• A CERTAIN RISKS ARE STILL INVOLVED THAT YOU SHOULD BE WARY ABOUT

However, there are still a certain risky factors that are seen taking place and you need to take well advised and known cautions to tackle it. While you can see that the investments in the unlisted and pre IPO shares have the capability of giving and bringing back higher and superior returns, they are usually accompanied with higher number of risks as well due to various reasons such as lack of liquidity, the presence of information, higher rates of mortality and so on. This is the reason why the investors need to be very careful and be handy with their cautions techniques while they put in their investments in the Pre IPO companies.

The pre IPO shares in India are quite a common affair that has equal share of advantages and the same amount of risks as well. Finstream Consultancy LLP is the one who has the expertise in market speculation for maximum benefits.

Read above article useful information & knowledge for you.