There could be various reasons for margin improvement. To understand what they are, one will have to listen to the pre-IPO analyst concall, someone must have surely asked this question. Whatever their reply, a more practical reason is that in unlisted companies, managements have an incentive to understate profits (to save tax) and in listed companies, managements have an incentive to overstate them (to boost share price). You will find this pattern in dozens of companies – the performance dramatically improves in the IPO year or just before IPO compared to distant past. Pre-IPO Vs. Post-IPO is not a like to like comparison, I don’t try to dig too deep into it but look at them going ahead. But your point is logically valid.
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