Burnt your fingers in IPOs before? Check for Promoter standing
Posted on: July 10, 2008 - 9:10am
Financeman
Posts: 79
Joined: 2008-04-30
Burnt your fingers in IPOs before? Check for Promoter standing
Check promoter standing
This by far is the most important factor in any investment decision. A good promoter or management team is important for any business success, especially over long periods. While businesses may have their ups and downs, a good management will take all necessary steps to ensure profitable performance. Secondly, they would be constantly looking at new business opportunities, thereby ensuring regular growth in the company. Thirdly, we are reasonably certain that the company money will not be deliberately misused or siphoned off to the detriment of the shareholders.
Therefore, look at the promoter’s background, the experience he has in the industry, the performance of the other companies promoted by him, his track record, investor complaints etc. Read the risk factors very carefully especially those pertaining to the promoter/management. Check for any serious litigation against the promoter or the company. See whether the company is a defaulter to the banks/FIs and the reason thereof.
Check promoter standing
This by far is the most important factor in any investment decision. A good promoter or management team is important for any business success, especially over long periods. While businesses may have their ups and downs, a good management will take all necessary steps to ensure profitable performance. Secondly, they would be constantly looking at new business opportunities, thereby ensuring regular growth in the company. Thirdly, we are reasonably certain that the company money will not be deliberately misused or siphoned off to the detriment of the shareholders.
Therefore, look at the promoter’s background, the experience he has in the industry, the performance of the other companies promoted by him, his track record, investor complaints etc. Read the risk factors very carefully especially those pertaining to the promoter/management. Check for any serious litigation against the promoter or the company. See whether the company is a defaulter to the banks/FIs and the reason thereof.