NAME: GEET.RAJESH.

BASANTANI

COURSE: SYBAF

ROLL NO: 07

SUBJECT: FINANCIAL MARKET

OPERATIONS

TOPIC: INVESTMENT AVENUES IN

INDIA
 INVESTMENT AVENUES
Learn to have money work for you rather than you work for Money . -
Robert T. Kiyosaki
 INVESTMENT
INVESTMENT is the employment of funds on assets with the aim of earning income or capital
appreciation. In other words, Investment is the commitment of funds which have been saved
from current consumption with the hope that some benefits will be received in the future. Thus it
is a reward for waiting for money. Saving of the individuals are invested in assets depending on
their risk and return demands, safety money, liquidity, the available avenue for investment,
various financial institutions, etc. For the achievement of above goals appropriate decisions have
to be taken.

Most of the people keep aside a part of their income as savings. On the other end, Investment is
the act of investing the saved money in to financial products with a view to generate income
from future. In short, when a person has more money than he requires for current consumption,
he would be coined as a potential investor.
DEFINITIONS OF INVESTMENT
Different thinkers interpret the word ‘Investment’ in their own ways in different periods.
However, the ideology or concept of investment is same in between them.
Some famous definitions of Investment are;-
“Sacrifice of certain present value for some uncertain future value”
-WILLIAM F. SHARPE-
“Purchase of a financial asset that produce a yield that is proportional to the risk assumed over
some future investment period”
-F. AMLING
Investment avenues refer to the different alternatives, through which a person can channelize
his money at profitable manner. For a person, who can invest his money in real investment,
gold/silver, bank deposits, share & securities, mutual funds, insurance, government securities,
post office savings, provident funds etc. However, Investment avenues are not free from all
defects. Each avenue carries its own merits and demerits. These results investors face so many
problems while executing their investment such as; Misrepresentation about investment
avenues, Delay in redemption request, High volatility, Political changes, High inflation,
Untimely investment etc. Hence the study also covers the areas of problems faced by salaried
group of people while making their investments.
 TYPES OF INVESTMENT AVENUES
14.Savings Account with Sweep in Facility
1.Public Provident Fund (PPF)
2.National Pension System (NPS) 15.Short Term Debt MF

3.Equity Linked Savings Scheme (ELS 16.Equity Linked Savings Scheme (ELSS)
S) 17. Fixed Deposit
4.Tax Savings Fixed Deposit 18.Recurring Deposit (RD)
5.Unit Linked Insurance Plans (ULIPs) 19.Direct Equity and Equity-Oriented Mutual Funds
6.Direct Equity Investment
20.Gold
7. Mutual Funds
21.Real Estate – Residential
8.Commercial Real Estate
22.National Savings Certificate (NSC)
9.Initial Public Offer (IPO)
23.Tax Saving FD
10.Fixed Deposit
24.Bonds
11.Recurring Deposit
25.Monthly Income Scheme of the Post Office
12.Liquid Mutual Fund
26.Monthly Income Scheme of Mutual Fund
13.Ultra Short Term Debt MF Plans
 REAL ESTATE INVESTMENT
Definition: Real estate investing refers to the purchase of property as an investment to generate
income rather than using it as a primary residence. In simple terms, it can be understood as any
land, building, infrastructure and other tangible property which is usually immovable but
transferable.
Some of the examples of real estate are a house, office building, agricultural land, commercial
plot, etc. It is considered to be a secured form of investment.

Classification of Real Estate

Real estate includes various properties which can be classified by their uses. These are as
follows:
Residential Real Estate: The real estate which consists of home, i.e., single, duplex, triplex,
township, bungalow etc. used
for residential purpose. Whether it is a newly constructed property or a house to be resold by the
owner.
Industrial Real Estate: A large scale property utilized to build factories, manufacturing units,
warehouses, distribution centers, etc. are categorized under industrial real estate.
Commercial Real Estate: The properties or office buildings such as a complex, are parted into
multiple small units. These are rented out or used to run various businesses. Therefore, they are
known as commercial real estate.
Retail Space: These properties are used as showrooms, restaurants, shopping malls, retail stores,
etc. either individual units or multiple units located in the prime location.
Land: Any vacant land where activities like ranching or farming take place is also a form of real
estate.
Fix and Flip Properties: The residential properties which are in a poorly maintained state and are
available at a low price are termed as the fix and flip properties. These properties, when purchased
by the buyers involved in renovation and repairs of properties to modify them and sell at a high
price.
Mixed-Use: A single high-end real estate project which constitutes of different types of properties
mentioned above to ensure diversification and minimize the risk of project failure, is termed under
mixed-use real estate.
Features of Real Estate Investing

When we talk about real estate, we can say that it requires a lot of foresightedness and capital
investment to expect fruitful returns.
Let us now understand the characteristics of real estate investment one by one
 Tangible: Real estate or properties are one of those investments which have a physical existence
and can be touched and seen.
 Immune to Inflation: When economic inflation creates a negative impact on the value of other
investments, investing in real estate is a fruitful option. It is the only investment which results in
value appraisal in adverse situations.
 Allows Use of Leverage: The financial institutions are attracted towards funding for real estate
because of its real or physical existence.
 Uncertain Maturity Period: Real estate investment does not have
any fixed maturity period like in other investments such as fixed
deposits and bonds. It is the owner who decides whether to hold
the property or sell it.
 Value Enhancement: Investing in properties can provide dual benefit to the
investors. On the one hand, real estate generates rental income, and on the other hand,
its value keeps on increasing in the long run.
 Low Liquidity: One of the essential features of real estate is that it is a capital asset.
Therefore, it cannot be frequently bought or sold like stocks or equity.
 Needs Management: Real estate investment is buying a physical asset which involves
the expenditure on its maintenance. The investor also needs to manage the source of
income so generated.
 Universally Acceptable as Collateral: Financing the properties by taking them as
collateral is very common among the banks and other financial institutions.
 Profitable Even During Recession: Real estate investments have been considered as
one of the safest investments. If done wisely, they yield profit or generate income even
at the time of recession
Means of Earning Through Real
Estate

        
Benefits of Investing in Real Estate

Investment in real estate can prove to be beneficial in the long run. If done wisely, it may
generate lucrative returns.
The advantages of pooling money in real estate are as follows:
• Hedge Against Inflation: Unlike other assets, real estate is not adversely affected by
inflation. Instead, its value and income increase with the rising economy.
• Rent Pays Off for Mortgage: Residential and commercial properties are the only assets
which have the capability of generating income through rentals to pay off the interest on
their mortgage.
• Stable Income: It can be seen as the most significant source of generating passive income.
The investors can rent out their property to ensure regular and steady cash inflow.
• Tax Benefits: Real estate investors relish tax exemptions on the rental income up to a
specific limit. Even the tax rates for such investments when made for the long term, are
quite low.
• Self Decision Making: A real estate investor is free to make his or her own decision, similar
to running any other business entity. In short, the investor is his or her boss.
• Financial Security: As we know that putting money in real estate is a long term investment.
The investor has the possession of a physical asset, hence providing financial security to the
person.
• Value Appreciation: Real estate investment is the purchase of property which encounters
capital appreciation in the long run.
 Limitations of Investing in Real Estate

When real estate is a profitable investment, it has some limitations

which are discussed below:

High Maintenance and Management: Real estate investment is

buying a physical asset which involves the expenditure on its
maintenance. The investor also needs to manage the source of income
so generated.

Huge Transaction Cost: Buying and selling of properties is a costly

affair. The transaction cost, including registry charges, legal expenses,
diversion, etc. are so high that the cost of investment increases for the
buyer.
Creates Financial and Legal Liability: The investor may become overburdened by the
financial liability if he or she buys a property on loan. Even the transfer of ownership at the
time of property purchase creates a legal obligation on the investor.
Less Liquid in Nature: Unlike other investments like stocks, real estate cannot be easily
bought and sold regularly. Therefore, it may not prove to be a suitable investment option
for investors seeking short term profits.
Requires Dealing with Market Inefficiencies: Sometimes, the investors who lack the
necessary information about the prospective real estate project, pool in their money at not
so profitable projects.
No Fixed Maturity: Real estate appraisal does not take place at a fixed rate in a defined
period. The capital appreciation in case of properties is a long term process; it is though
presumed but not pre-defined.
 PUBLIC PROVIDENT FUND (PPF)
Public Provident Fund (PPF) is a tax-free saving scheme
regulated by the Indian Government. It is a long-term
investment scheme with a lock-in period of 15 years.
Individuals can start investing in PPF with a minimum amount
of Rs. 500 p.a. The interest rate is set and paid by the Period Interest Rate
government for every quarter. PPF interest rate for the third
quarter of the year 2020-21 i.e. from 1st October to 31st October to December
7.1%
2020
December is fixed at 7.1%. 
July to September 2020 7.1%
Previous year interest rates: April to June 2020 7.1%
January to March 2020 7.9%
October to December
7.9%
2019
July to September 2019 7.9%
April to June 2019 8.0%
January to March 2019 8.0%
Eligibility Criteria
Indian Overseas
•Only an Indian resident can only open a PPF account Bank
Axis Bank State Bank of India IDBI Bank
•NRIs are not eligible to open PPF accounts. However,
a resident Indian who has become an NRI after opening
an account can continue the account until maturity
•Parents/guardians can also open PPF accounts for their Punjab National
ICICI Bank Bank of Baroda Corporation Bank
Bank
minor children
•Opening of joint accounts and multiple accounts are
not allowed Oriental Bank of State Bank of State Bank of
Bank of India
Commerce Bikaner & Jaipur Hyderabad

Central Bank of
Allahabad Bank Canara Bank Union Bank of India
India
List of Banks that Open PPF Account
Following banks are authorized to open a PPF
account for its account-holders:
United Bank of
Indian Bank Dena Bank Vijaya Bank
India

Bank of State Bank of State Bank of State Bank of

Maharashtra Patiala Travancore Mysore
 Key Features of Public Provident Fund
Here are some of the primary features of public provident fund scheme:
•Lock-in period: A PPF account is a fixed-income, long term investment with a lock-in
period of 15 years. Premature withdrawals are allowed but only in case of emergencies. This
tenure can be extended by 5 years at the end of the actual lock-in period

•Minimum and maximum investment: Individuals need to make a minimum investment

of Rs. 500 annually. A maximum investment of Rs. 1.5 lakh can be made in one year in PPF
account

•Taxation: PPF comes under the Exempt-Exempt-Exempt (EEE) category of tax policy

which implies that the principal amount, the maturity amount, as well as the interest earned
is exempt from taxes

•Loan against PPF: A PPF account holder can take a loan against the balance from the
beginning of 3rd financial year till the end of the 6th year from the date of account opening
Benefits of PPF:
•Complete capital protection, backed by a sovereign guarantee
•Tax-free earnings upon maturity
•Returns guaranteed, as per the interest rates determined by the Central Government (these
are set on a quarterly basis)
•Partial withdrawal and loan facilities
•Option to extend the scheme tenure (with or without contributions)
•Easy account opening through Post Offices or banks
•Minimum investment of just Rs. 500/- per year, making it ideal for small savers

Limitations of PPF:
•Difficult to consistently beat inflation with the PPF interest rate
•High lock-in period of fifteen years
•No facility for NRI’s and HUF’s to open a PPF account
•Only one account allowed per citizen
•Account cannot be closed prematurely before maturity
•Maximum investment per year is restricted to Rs. 1,50,000/-
 TO SUM UP
Broadly, the PPF account is a good investment avenue, especially for those individuals who
do not work in the corporate sector and hence don’t have an EPF account, even for salaried
individuals nonetheless . From a tax perspective, this is a very sound avenue, giving you tax
deductions on investment as well as tax exemption at the time of maturity. This money is
yours for keeping – it cannot be attached by the order of a court to any debt or liability you
may have.
However, it is important to note that from a liquidity point of view, your funds are locked in
for 15 years, and withdrawals are limited. Given that it is such a long term investment (16
years from beginning to end); the rate of return might be considered low by some for this
tenure. But keep in mind, it is guaranteed, backed by the Government and cannot be attached
to any debt.
To conclude, when choosing your tax saving avenue, be sure to choose according to your
risk appetite. If you have a risk appetite of a conservative to a moderate investor, the PPF is a
very good investment avenue
 MUTUAL FUNDS

What Is a Mutual Fund?

A mutual fund is a type of financial vehicle made up of a pool of money collected from
many investors to invest in securities like stocks, bonds, money market instruments, and
other assets. Mutual funds are operated by professional money managers, who allocate the
fund's assets and attempt to produce capital gains or income for the fund's investors. A
mutual fund's portfolio is structured and maintained to match the investment objectives
stated in its prospectus.

Mutual funds give small or individual investors access to professionally managed

portfolios of equities, bonds, and other securities. Each shareholder, therefore,
participates proportionally in the gains or losses of the fund. Mutual funds invest in a
vast number of securities, and performance is usually tracked as the change in the total
market cap of the fund—derived by the aggregating
performance of the underlying investments.
Mutual funds are a popular investment avenue among investors, as they are easy to
invest in and give higher returns as compared to other traditional asset classes such as
FDs or saving bank deposits. At the same time, portfolio diversification techniques as
well as availability of the options of SIP, STP and SWP make them a viable investment
instrument. Further, you are not required to proactively monitor your stocks, as your
fund manager does the task for you. As a result, mutual funds have become a much
sought after investment avenue today with record investments in the recent months.
Investors typically earn a return from a mutual fund in three ways:

1.Income is earned from dividends on stocks and interest on bonds held in the fund's
portfolio. A fund pays out nearly all of the income it receives over the year to fund owners
in the form of a distribution. Funds often give investors a choice either to receive a check
for distributions or to reinvest the earnings and get more shares.

2.If the fund sells securities that have increased in price, the fund has a capital gain. Most
funds also pass on these gains to investors in a distribution.

3.If fund holdings increase in price but are not sold by the fund manager, the fund's shares
increase in price. You can then sell your mutual fund shares for a profit in the market
 TYPES OF MUTUAL FUNDS

 Equity funds
 Fixed income funds
 Index funds
 Balanced funds
 Money market funds
 Income funds
 International/global funds
 Speciality funds
 Exchange Traded Funds (ETFs)
 ADVANTAGES
Advanced Portfolio Management
When you buy a mutual fund, you pay a management fee as part of your expense ratio,
which is used to hire a professional portfolio manager who buys and sells stocks, bonds,
etc. This is a relatively small price to pay for getting professional help in the
management of an investment portfolio.

Dividend Reinvestment
As dividends and other interest income sources are declared for the fund, it can be used
to purchase additional shares in the mutual fund, therefore helping your investment
grow.

Risk Reduction (Safety)

Reduced portfolio risk is achieved through the use of diversification, as most mutual
funds will invest in anywhere from 50 to 200 different securities—depending on the
focus. Numerous stock index mutual funds own 1,000 or more individual stock
positions.
Variety and Freedom of Choice
Investors have the freedom to research and select
from managers with a variety of styles and
management goals. For instance, a fund manager may
focus on value investing, growth investing, developed
markets, emerging markets, income, or
macroeconomic investing, among many other styles.
One manager may also oversee funds that employ
several different styles. This variety allows investors
to gain exposure to not only stocks and bonds but
also commodities, foreign assets, and real estate
through specialized mutual funds. Some mutual funds
are even structured to profit from a falling market
(known as bear funds). Mutual funds provide
opportunities for foreign and domestic investment
that may not otherwise be directly accessible to
ordinary investors.
 DISADVANATGES
Tax Inefficiency
Like it or not, investors do not have a choice when it comes to capital gains payouts in
mutual funds. Due to the turnover, redemptions, gains, and losses in security
holdings throughout the year, investors typically receive distributions from the fund that are
an uncontrollable tax event.
Lack of Liquidity
A mutual fund allows you to request that your shares be converted into cash at any time,
however, unlike stock that trades throughout the day, many mutual fund redemptions take
place only at the end of each trading day.
High Costs
Mutual funds provide investors with professional management, but it comes at a cost—those
expense ratios mentioned earlier. These fees reduce the fund's overall payout, and they're
assessed to mutual fund investors regardless of the performance of the fund. As you can
imagine, in years when the fund doesn't make money, these fees only magnify losses.
Creating, distributing, and running a mutual fund is an expensive undertaking. Everything
from the portfolio manager's salary to the investors' quarterly statements cost money. Those
expenses are passed on to the investors. Since fees vary widely from fund to fund, failing to
pay attention to the fees can have negative long-term consequences. Remember, every rupee
spent on fees is a rupee that is not invested to grow over time.
 FIXED DEPOSITS
A fixed deposit is one of the most popular investment options
in India. Several people consider fixed deposits as the best
investment option and invest a significant portion of their
savings in this instrument. But what is a fixed deposit?
A fixed deposit is a type of deposit in which a sum of money
is locked for a fixed period of time. However, the tenure for
the fixed deposit is decided by the person who invests his
funds. This tenure could be anywhere from a few days to
several years. In return for locking in these funds, fixed
deposits pay the depositor a fixed rate of interest. All banks
offer fixed deposits at different rates. Opening a fixed deposit
is extremely simple and can be done both online and offline.
To understand whether investing in a fixed deposit is the best
option, we need to look at the advantages and disadvantages
of fixed deposit account.
More than half of our country's household savings are in bank deposits. According to the RBI
Bulletin, 53% of a household savings are kept in a bank deposits. A fixed deposit has
historically been the most attractive investment option in our country. During times of
economic crisis, people use bank FDs as a flight to safety. They move from riskier asset
classes to safer ones to protect their capital. According to financial planners, the ongoing
Covid19 has also forced many HNIs and other retail investors to switch to fixed deposits, in
order to preserve their capital.

Fixed Deposits are long-term investment tools that help investors save some money from
their income for rainy days. As one of the most traditional and safest means to invest,
many prefer it for wealth creation and saving taxes. The deposits are safe and secure
and you will meet your financial goals without any issues.   Yes, it is eligible for tax
deduction under 80C.

Here's a brief on kind or types of fixed deposits offered by banks:

Regular fixed deposit: A standard fixed deposit requires an investor to invest his money for
a fixed period of time, at a predetermined interest rate. Standard fixed deposit tenures vary
from 7 days to 10 years. This is the most popular FD option chosen by investors. Almost
every bank offers the standard fixed deposit to its customers. This deposit allows premature
withdrawal.
Tax saving Fixed Deposit: Tax saving fixed deposits have a lock-in period of five years.
They do not permit premature withdrawal. They allow you to claim tax deduction of
maximum up to ₹1.50 lakh under Section 80C for the amount deposited. But the interest
generated from the FD is liable to be taxed.

Special Fixed Deposit/ Non withdrawal FDs: Special Fixed Deposits are usually offered
for a special time period. A special time period can be anything, like 290 days or 390
days, etc. Special FDs do not allow withdrawals before maturity and they offer a higher
interest rate.

Senior Citizen Fixed Deposit: The senior citizens’ fixed deposit scheme allows

individuals over 60 years of age to open an FD account. These deposits offer higher
interest rates of around 0.50% over the regular interest rates. These FDs offer to choose
interest payout at regular intervals like monthly or quarterly, or at maturity.

Regular Income Fixed Deposit: These deposit are suitable for those who are dependent
on the FD for as a source of income. These FDs allow you to opt for regular payouts at
monthly or quarterly basis.
 ADVANATGES
Assured rate of return:
The major reason why people prefer investing their funds in a fixed deposit is the assured rate of
return. Once you invest your funds in a fixed deposit account, you can be guaranteed of
receiving the stated rate of return. Banks publish the fixed deposit rate of interest on their
website and in bank branches which makes it easy for a customer to ascertain how much return
he will get. Banks also have a fixed deposit interest calculator on their websites where a
customer can calculate the interest he will receive on investing a particular sum of money for a
particular period of time.

Tax threshold for interest:

Banks are not mandated to deduct tax on any interest until it crosses
Rs. 10,000. This means unless the total interest earned by a customer
on different fixed deposits totals Rs. 10,000, the bank will not deduct
any tax. This provides comfort to small deposit holders
Flexible tenure:
The tenure for a fixed deposit is flexible and depends on the deposit holder. Each bank has their
own minimum tenure rules however, the final decision can be taken by the deposit holder. It is
also possible to decide whether to redeem the fixed deposit or to extend it for the same period of
time.

Easy liquidation:
It is relatively easy to liquidate a fixed deposit. For FDs booked online, they can be liquidated
online via net banking as well. Otherwise, most bank branches have a form to liquidate the FD.

Loans against fixed deposit:

An FD is a dependable instrument to keep in case of financial emergencies. Taking a loan against
a fixed deposit is very easy. You can take a loan up to 95% of the fixed deposit amount
depending on the bank. This makes it a dependable investment
 DISADVANATGES
Reducing interest rates:
Even though fixed deposits have a lot of advantages, the interest rates
do not move in line with inflation. This means in some cases, they may
actually earn less than the inflation rate. The interest rates for fixed
deposits have been falling in recent times which has reduced the
attractiveness of this investment.

Locked in funds:
Fixed deposits lock in your funds for a fixed duration. These funds are not available for
you to use unless you withdraw the funds prematurely. Fixed deposits are not at all liquid
and cannot be converted into cash easily.

Penalties on withdrawal:
Banks charge penalty to the depositors who withdraw their fixed deposits prematurely.
This penalty is in the form of a reduced rate of interest.
No tax benefit:
The interest earned on fixed deposit is added to the taxable income of the deposit holder.
There is no deduction on any interest earned. However, senior citizens get a deduction up
to Rs. 50,000 on interest.

Fixed interest rate:

The rate of interest on a fixed deposit remains the same for the entire duration of the
fixed deposit. Even if the rates increase, the bank does not pay additional interest to the
deposit holder.
After looking at the advantages and disadvantages of a fixed deposit account, it is clear
that this is an instrument for people who do not have much of a risk appetite. If you’re a
person who likes to see fixed income in his account, then this is the instrument for you.
The earnings from this form of investment are limited. However, banks have a sweep in
facility where excess funds from a savings account  can be diverted to a fixed deposit
until the customer needs these funds. By enabling this feature, you can increase the
returns from your fixed deposit account.
 INITIAL PUBLIC OFFER (IPO)
Definition: Initial public offering is the process by which a private company can go
public by sale of its stocks to general public. It could be a new, young company or an old
company which decides to be listed on an exchange and hence goes public.

Companies can raise equity capital with the help of an IPO by issuing new shares to the
public or the existing shareholders can sell their shares to the public without raising any
fresh capital.

Description: A company offering its shares to the public is not obliged to repay the
capital to public investors.

The company which offers its shares, known as an 'issuer', does so with the help of
investment banks. After IPO, the company's shares are traded in an open market. Those
shares can be further sold by investors through secondary market trading.
Initial public offerings (IPOs) are investments that truly get the blood pulsing. They
are almost always exciting and risky. As with most things that have the potential for a
very high upside, uncertainty is an inextricable variable in the overall investment
equation. As discussed previously, the words hype and IPO are often used in the same
sentence. It is not uncommon to see an IPO soar 20 percent or more on the first day
and then, in some cases, sink back to its beginnings in a matter of days or weeks . If I
could point to two factors that will make the biggest difference to an IPO investor, I
would name patience as the most important trait, and research as the single most vital
task for successful investing

What IPOs Mean to the Economy?

The number of IPOs being issued is usually a sign of the

stock market's and economy's health. During a recession,
IPOs drop because they aren't worth the hassle when share
prices are depressed. When the number of IPOs increase,
it can mean the economy is getting back on its feet again.
 ADVANTAGES
 
First-mover advantage
This is especially true when reputed companies announce an IPO. You get a chance to buy the
company’s shares at a much lower price. This is because once the company’s shares reach the
secondary market, the share price may go up sharply.
 
High returns
If the company has a potential to grow, buying shares in
an IPO can be benefit you. Strong fundamentals of the
company mean that it has a good chance of growing
bigger. This can be advantageous to you as well.
You stand a chance to earn good returns over
the long-term.
Listing gains
When a company gets listed on the stock market, it may be traded at a price that is either
higher or lower than the allotment price. When the opening price is higher than the
allotment price, it is known as listing gains.
Generally, investors expect an IPO to perform well on listing due to factors such as market
demand and positive bias. However, this does not always happen. It is possible for a stock
price to drop by the end of the first trading day too.
In reality, listing gains may not actually result in good returns for the investor in the long
term. So, if you are a trader interested in quick returns, it may be suitable. But for long
term investors, it is important to identify a company that can offer high returns five or even
ten years down the line.
 
To sum up
IPOs are big events in the stock market for a reason. By investing in the right company,
you stand a chance to earn good returns in the long run. But the trick is to identify the good
performers from the rest.
 DISADVANTAGES
One major drawback of going public using an IPO is the time and expense of going
through the process. It's common for an IPO to take anywhere from six to nine months or
longer. During this time, the company's management team is likely to be focused on that
IPO, which could cause other areas of the business to suffer. Plus, it costs money to go
through with an IPO, from financial service and underwriting fees to filing fees. And once
a company goes public, it becomes subject to a host of additional reporting and disclosure
requirements, all of which also cost money.

Furthermore, once a company goes public, it must answer to its shareholders. When
shareholders gain a significant ownership stake in a company, they can vote to override
management decisions, or vote to get rid of managers and directors altogether. And
because public companies often feel pressured to perform well for their shareholders, they
sometimes make poor business decisions, sacrificing long-term growth for short-term
profits.
 Initial public offerings (IPOs) are investments that truly get the blood
pulsing. They are almost always exciting and risky. As with most
things that have the potential for a very high upside, uncertainty is an
inextricable variable in the overall investment equation. As discussed
previously, the words hype and IPO are often used in the same
sentence. It is not uncommon to see an IPO soar 20 percent or more on
the first day and then, in some cases, sink back to its beginnings in a
matter of days or weeks . If I could point to two factors that will make
the biggest difference to an IPO investor, I would name patience as the
most important trait, and research as the single most vital task for
successful investing
THANKYOU