Post IPO Mantra: Veteran Market Investor Lays Out 3-Point Strategy For Companies
In a post on X, Samir Arora suggested that IPO-bound companies should be transparent in their communication of financial performance.
Helios Capital's Samir Arora has shared a few practical tips for companies planning to go public, emphasising ways to foster investor confidence and avoid unnecessary market volatility.
In a post on X on Friday, the veteran investor advised IPO-bound companies to maintain transparency in disclosing their financial performance. He underscored how crucial this was, especially during the period around a company's market debut.
"Make sure you don't have bad results in the first quarter after the IPO. That really upsets investors. Better to delay the IPO by a few months if immediate results are below expectations," Arora said.
According to him, if internal forecasts indicate a soft quarter, it is prudent to delay the IPO.
He also warned companies against creating unnecessary volatility by leaving long gaps between results and the conference call.
"If you are having bad results, but you are going to talk super bullish in a conference call or vice versa, don't keep one day between results and call and create unnecessary volatility in between," he added.
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His final piece of advice was maintaining consistency. He said businesses should ensure their updates don’t mislead investors ahead of actual results.
“If you are going to give a bullish quarterly business update and then disappoint with actual results a few days later, better rethink how to give a business update and not be seen as totally misleading,” he said.
Arora's comments come amid growing concerns over the valuation of IPO-bound companies and the trend of many reporting sudden profits in the lead-up to their IPO quarter. Many users agreed with Arora’s comments, calling for greater transparency from companies.
"Meanwhile, promoters are chilling after the IPO and thinking about how to make a fool of investors by exactly doing the opposite of what they have told. Think about it. Makes a lot of sense," a user commented.
Another user pointed out that it has become a “common pattern” for companies to indulge in such misleading practices.
One user labelled the current market “Kalyug Market”. “If they (companies) don't show the rosy picture during IPO…I doubt they would be able to convince the retailers even at half their offer prices,” the comment read.
