When the Harsha Engineers IPO GMP was available for subscription on September 14 to be continued til September 16, the market conditions for this organization were great.
Harsha Engineers really grabbed the attention of multiple investors because they had a strong growth of revenue, reasonable prices, as well as profitability.
Because of this, the subscriptions for the listings on the Grey Market became overwhelming at that time.
So today, I will tell you the benefits of Harsha Engineers going public with their IPO in the grey market as well as the cons of doing so.
Harsha Engineers IPO GMP: IPO Advantages
There are actually a lot of advantages to going public with a company’s IPO, which I will tell you all about in a moment.
Harsha Engineers International Ltd was able to raise a great amount of capital because of its IPO.
And companies doing so can easily gather enough funding for things like funding their general operations, R&D, capital expenditures, marketing, and growth opportunities.
Gain a High Share Valuation
Companies like Harsha Engineers International Ltd have shares that can be traded on a public-based stock exchange.
And these companies can easily have better liquidity compared to having the shares private. So the market capital valuation, as well as the prices of stocks, become higher.
Fund for M&A Transactions
Because of this high valuation, companies like these with IPO can have their stock used for corporate-level M&A transactions.
And you can raise more cash proceeds for M&A transactions, mainly with an IPO or other future offerings of the stock.
Reduce Corporate Dept
Many corporate companies end up in dept more than they might let their competitors know about.
So if a company like Harsha Engineers International Ltd had to recover from corporate debt, having an IPO or other share offerings can really help such a company reduce its corporate debts.
Maintain the Corporate Identities and Become Better Known
If a company like Harsha Engineers International Ltd chooses to have an IPO to create its own exit strategy from getting acquired by other companies, it can still maintain its corporate status and name.
So the corporation can stay as the parent company and keep the recognition of its name, and it might be something the founder of the company wants.
As with an IPO, a company can become more recognizable, which will help it get the attention of various potential customers as well as newer strategic partners because of various media coverage and press releases.
And these public companies get to be more transparent compared to private companies because of their need of having to disclose all information publicly.
Attract and Retain Employees
When companies become public because of an IPO, they can easily attract different kinds of employees.
And these employees can have a lower tolerance for risks while having plans for public stock options as well as stock grants.
Also, the employees that are already working currently in these companies might become eligible for newer stock options or even various plans for purchasing discounted stock.
And some of these current employees of such companies might even want to work for public companies that are larger in size compared to smaller companies or even any kind of start-up.
Again, some of these employees could even have more entrepreneurial bones in their bodies. And that could lead them to get higher stock rewards as investors.
Harsha Engineers IPO GMP: IPO Disadvantages
Some of the disadvantages of companies like Harsha Engineers International Ltd that have an IPO available in grey markets can face some disadvantages.
These disadvantages may look like these:
- CEOs and CFOs will still have to commit their time to the companies
- The companies could easily get distracted from their business and even miss various opportunities
- Issuing the shares of a company in an IPO does have some costs
- These companies will have to manage their short-term quarterly results in lieu of long-term goals
- They might face various scrutiny from the public
- What if they can’t complete the entire IPO process?
- This will have a much higher-weighted average cost per their capital
Harsha Engineers IPO GMP did well for Harsha Engineers International Ltd, and they have found most of the advantages of having their company become public with an IPO on the grey market beneficial.