The year 2020 has been plagued by epidemics. The whole world was in financial trouble. Our country was not an exception. All financial markets began to go down. After a sharp fall in March 2020, the stock market no longer makes sense, experts say. Very anxious, heartbroken people came out of the market and suddenly the market took a turn for the worse. “The market always surprises investors,” he said. Further, the index easily reached new highs.
IPO Performance In 2020
At the same time, in the year 2020, some good initial stock sales – IPOs – hit the market and smart investors became richer. Root Mobile, Happyest Mind, Cams, Rosary Biotech, Chemox Chemicals, Mazgaon Dock, Glad Pharma, Burger king and Mrs. Bacter’s Foods are some of the examples in which the money invested in IPO has almost doubled in 12 to 15 days.
List of Most Profitable IPO In 2020
| Company | IPO Price | Listing Price |
|---|---|---|
| Burger King | ₹.60 | ₹.120 |
| Happiest Mind | ₹.166 | ₹.382 |
| Indigo Paints | ₹.1490 | ₹.3100 |
| Root Mobile | ₹.350 | ₹.375 |
| Rozari Biotech | ₹.425 | ₹.664 |
| Camps | ₹.1230 | ₹.1800 |
IPO Opportunity In 2021
The market at new heights may have made some middle class people feel that they have missed out. Also, new investors may be wondering whether 2021 will be best for initial public offering (IPO) as 2020. It is hoped that this article will guide the general investor around this and similar questions.
So, dear readers, market transactions are going on uninterruptedly. It never stops. In the same way, the right opportunities are always coming. You just have to be more discriminating with the help you render toward other people.
In the stock market there are generally two extremes and even very different reactions. To some, the stock market is a mere speculation. The elders advise you to stay away from this gamble. So for some churches, stocks seem to be the only, most attractive form of investment. In fact, both ideologies are appropriate in some situations. So how to get the golden mean out of this? How to maximize interest or return on your savings with minimal risk?
An initial public offering (IPO) is the best option to maximize profits with minimal risk in the stock market. With this type of investment, a normal / new entrant can try their luck and skills in the stock market. Also, those who invest aggressively in the stock market can reap more benefits by investing regularly in IPO types.
How is the Initial Public Offering Process Done?
When a new company wants to increase its share capital or list its shares in the capital market, it sells its shares to the general investors through initial public offering (IPO). These shares are generally available at a price lower than the market value of that company.
Such IPOs are first advertised in newspapers and other social media. This advertisement usually contains information on how many shares will be available to the public, at what price, how long they will be able to bid and when such shares will be listed in the market. A few days later, the average investor can place his bid.
You can predict whether or not you will receive the stock based on the overall response from investors. Within a few days, the distribution of these shares is completed and the shares are credited to your demat account, if you are successful. Within a few days, these stocks were listed on the Mumbai Stock Exchange (BSE / National Stock Exchange) NSE and started trading regularly. This stock makes huge profits when all is generally listed.
All of this process takes about twelve to fifteen days. Also, even if you bid as per the new ‘ASBA’ rules, the amount is not withdrawn from your savings account. The bid amount is only blocked. Of course you can’t use it for a few days. This amount is deducted from the savings account only if you get the shares with luck. Otherwise the blocked amount is re-opened for use in your savings account. In the year 2020, many companies have launched IPOs in which ordinary investors have made huge profits.
What to do to Participate in an IPO?
- First of all, open a demat account in the name of yourself and all the knowledgeable people in the house. Your bank or a stockbroker can help you with this.
- Look at the information in various social media (such as newspapers).
- The new ‘IPO’ was advertised to get general information about the company. For this, a lot of information available in the internet information network can be used.
- Some websites also give an estimate of the price at which the shares will be listed. If it is not reliable enough, you should make your guess by keeping information about it
- If you think it is appropriate to bid for the sale of such shares, you should participate in the sale process by keeping the right amount in your affiliated bank account.
- If you get the shares, you should sell them at a reasonable price when they are listed and make a profit. However, a few days after listing, the stock may go up too much. Therefore, every investor should decide when to sell his shares in an IPO based on his experience and his risk appetite.
- Get information on upcoming stock sales.
- Keep in mind that you are a general investor (retail investor). Investors with high assets (HNIs), foreign institutional investors (FIIs), banks, etc. are also applying for IPOs in different reserved categories. From this type, it is easy to know the total number of applications filed. Generally, all IPOs are open for three days for filing applications. You should not rush to pay. Find out how much other large organizations have participated on the last day of the sale, and then apply.
What Not to Do?
- Don’t rely on information on social media alone. It is important to make a reasonable estimate of the price that can be obtained at the time of listing.
- Not all IPOs will give good returns. Be careful not to be misled by misinformation.
- Do not apply for a single application by linking the entire amount to a single demat account. Various applications should be made in the name of all the members of the family. This will increase the chances of getting shares.
- The amount of ‘IPO’ application should not exceed two lakhs, otherwise such application will be counted in ‘HNI’ category.
- Applied for IPO many times but never got any share. There is no luck for an IPO, keep applying without making such complaints. Believe me, a very good IPO will be waiting for you in the future.
- Complaints that there will be confusion in the IPO allotment, so I will not get it, are useless. The IPO distribution process runs entirely within the framework laid down by SEBI. Many rules are followed. So there is no chance of you being cheated in the distribution.
Offer for Sale (OFS)
This is a different type of initial public offering (IPO). Sometimes the current organizers of a company offer a portion of their total equity investment for sale to the general public. In this case a fixed ‘cut off’ price is suggested. The investor can bid for this price or more.
The recent example is OFS, a state-owned company owned by the Steel Authority (SAIL). The shares received in this form of OFS can be sold in just three days. This also reduces the risk in this type. This makes OFS a more attractive type than an IPO. Another point is that a company that launches OFS through a follow-on public (FPO) issue, if you already have a portfolio, you can sell your shares at market price (which is higher than the OFS price) and bid for OFS at a lower price.
Points to Consider Before Applying for an IPO
- In the event of a large IPO (like LIC), the liquidity of the market, ie cash flow, will be affected for a few days and the market will not go down for a few days. If this is the case, then if there is profit in other stocks, you should sell it and reduce the profit on hand / paper.
- Another important point is that when an IPO comes on the market, the response to the IPO from the market (good / bad) also affects other stocks in the industry. E.g. When Indigo Paints’ IPO came on the market, it received a very good response, when the shares of an established company like Asian Paint saw a lot of ups and downs. Therefore, if we can accurately predict the difference between the price of a parallel / affiliate company due to the upcoming IPO this year, it will be a good benefit.
- Every successful company whose market price is skyrocketing today, will have an IPO of its shares at some point. So participating in an IPO can be a great way to build a good portfolio. Of course, long-term retention companies need to be able to see.
- This year, the Indian government is looking to make the scheme a success by launching some ambitious IPOs (Air India, LIC). At such times too many demat accounts will be opened. Wise investor readers should consider which listed company will benefit from such a large number of demat accounts. So that they can take the shares of such a company first and sell them at a higher price in the future. Sujna did not say much.
Upcoming IPOs in the Year 2021
Many large companies intend to raise capital through IPOs in 2021. Some of these are listed below. However, the real reason for this is that when the IPOs hit the market, the market mood or the level at which the shares are offered in the IPO. The price is decided. Of course, companies are trying to time the IPO by exploring the market boom.
In the current year, the Government of India is expected to raise huge sums through export. It will also sell shares of publicly owned Air India, Life Insurance Corporation of India (LIC) in the open market. Apart from this, , Hinduja Finance, Shrei Equipment Finance and some other companies are at the doorstep of SEBI with plans to raise share capital.
Conclusion
The year 2020 turned out to be a lucrative one for the IPO. Some, however, may be tormented by the feeling of being deprived of this opportunity. But the consolation to this congregation is that the year 2021 has come with the uniform of strong IPOs of some good companies. Very good ‘IPOs’ are waiting for you in the future, but you have to be prepared to welcome them.
Take a Look
