Making easy and quick money from the IPOs in the stock market.
Yes, we are talking about the initial public offer i.e. IPO. If I tell in short, IPO is a way by which private companies come up with their issue by offering its shares to the public for the first time to raise funds for their business operations.
Now let’s discuss how to make money with IPO. A number of IPO issues come throughout the year. To apply in an IPO, you need a Bank account, Demat Account & Trading Account. Once you have opened up the accounts, the next thing is to search for upcoming IPO issues. You can get the upcoming IPO issue list at this link > chittorgarh.com/ipo/ipo_calendar.asp.
IPO’s always comes out with a price band. For example, if I check this IPO calendar link as on 17th January 2018, Amber Enterprises IPO opened up with a price band of Rs. 855-859 (you can click the company name on 17th January 2018 in the calendar to know the price band, an overview of the company, market lot size (maximum number of shares that will be allocated to one applicant), issue open & close dates).
As soon as you have identified the issue, the next thing you need to know is whether to invest or apply to that IPO or not? Being a new investor all you can do is to read the Brokerage house views on subscribing to the issue or not.
In case of Amber Enterprises, 5 brokerage house gave their views on the issue & 4 out of 5 have given a subscribe call to the issue. It means the IPO was good enough to be applied for listing gains and long-term investment.
The other way is to evaluate the top investors view on the IPO like SP Tulsian. You can find free reports on incoming IPOs on SP Tulsian's Website here.(I personally prefer going this way). If I read the report of Amber Enterprise on this link, I get a viewpoint of the investor in conclusion part to subscribe to the issue. In other words, SP Tulsian is optimistic about this issue and gave a green signal to apply for it.
Now imagine after evaluating the brokerage house views & investors report, you applied for the issue. You can read our article on How to apply for an IPO @...............................................
As you can see in the link > www.chittorgarh.com/ipo/ipo_calendar.asp?month=1&year=2018, the allotment will be out on 25th January 2018, i.e. you will come to know on this date whether shares have been allotted to you or not.
The probability of allotment of shares to you alone is very low but if you can apply for the IPO in the names of different family members as well then it becomes easier to get shares of the company through at least one application out of many family members applications. But still, it will be a possibility and not surety.
You will get a text message on your mobile number and also an email telling you about the allotment status. Now let us assume that by God’s grace the shares were allotted to you though there is no guarantee of it. (The shares allotted will reflect in your Demat Account).
From this calendar link, you can check the listing date of Amber Enterprises IPO (in this case it was 30th January 2018). The listing data is actually the date when the shares of the company will be listed on stock exchanges (NSE and BSE) and that is also the time when you will be able to buy or sell the shares.
On the listing day i.e. the 30th January 2018, the shares of Amber Enterprises got listed on NSE and BSE at a price of around Rs. 1175 while you applied to the price band of 855-859 (as mentioned earlier) and so giving a gain of around Rs. 5372 on 17 shares (1175-859=316*17 shares = 5372) assuming you have sold the shares on the listing day. I mentioned the profit for 17 shares as these were the maximum number of shares allotted to a single applicant.
So with an investment Rs. 15000 for just 15 days, you made a profit of around Rs. 5372. You can check the listing gains of past IPOs by visiting this link > www.moneycontrol.com/ipo/ipo-historic-table and that will give you a clear idea about the potential of making money from the IPOs.
Written By : Yogesh Lohia, senior writer at sharemarkethow.com