Profits through IPO

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    24-Jan-2015

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<ul><li> 1. PROFITS THROUGH AN IPOPage 1Copyright 2012 21G Investments. All rights reserved.</li></ul> <p> 2. WHAT IS AN IPO An IPO or an initial public offering is the first sale ofstock by a company to the public. These are oftenissued by smaller, younger companies seeking thecapital to expand, but can also be done by largeprivately owned companies looking to becomepublicly traded. It a process by which new company enters publicmarkets or Stock Market to raise equity.Page 2Copyright 2012 21G Investments. All rights reserved. 3. WHAT IS AN IPO Contd.. Infosys came with an IPO in 1993. It issued money though public offerings on stock exchange of India. The IPO was success.Thus, we can say that whenever a company needs money it goes public by issuing an IPO and after 14 days that IPO becomes a stock and is listed on the stock exchange of India.Page 3 Copyright 2012 21G Investments. All rights reserved. 4. How PROFIT IS BOOKED An IPO in all is a 14 day plan. It opens for 3 days. Looking at the credibility and fundamentals of that company I invest in it. Further that stock offers price range which is generally between 50-1000 INR. Depending upon the credibility of company and the sector the company intends to inculcate development the bid is made . If the stock gets oversubscribed i.e. demand for securities issued exceed the number of shares then the shares are allotted on pro-rata basis. Generally in this case the person who applies for higher bid gets more shares. Basic Rule of Thumb : If an IPO gets oversubscribed , chances of making money through it increases.Page 4Copyright 2012 21G Investments. All rights reserved. 5. Game Plan Put in as many applications as you can in an IPO that seems to givea good return. Return is estimated on the basis of difference of the price the IPOwas offered to you and at the price IPO was opened as we sell theIPO on the listing day. Profit = No. Of shares alloted *{(Price at which IPO opened)- (Priceat which IPO was offered)}. Therefore it becomes important to put in as many applications inorder to increase the allotment even if the stock is oversubscribed.Page 5Copyright 2012 21G Investments. All rights reserved. 6. Requirements to apply for an IPO1Must have a DEMAT account .2Maximum amount /application is 2 lacs INR. So, for15 days you should have 2 INR lacs in your DEMATaccount .3Since ICICI gives you a saving cum DEMAT account , for the time you are not investing you can get 3 % annual appreciation for your money.Page 6 Copyright 2012 21G Investments. All rights reserved. 7. FAQS1Why trust an IPO or Stock Market in general ? Over the past 5 years since 2008 the annual GDP growth for the country is 8-10% and market is still between 15000 - 17000. So there is a highly likely possibility that market has to enter a the bull leap towards 60000 index in next 5 years. Also many experts and trade analysts such as Rakesh Jhunjhunwala (Indias Warren Buffet) believe that market will make it all time high this year as India has about 7 BN $ in saving and not even 10% of it is in stocks. Since growth is proportional to investment there is a highly likely possibility of huge investment in take by the market leading to gains in stocks and IPOs.(It is like helping the companies now and enjoy the rewards later). This is better than trusting Indian Government. Why trust me ?2Trust comes with proof. I will always invest 8 lacs in IPOs (4 applications ) in what ever IPO I suggest so my chances of failure are always much more than my clients. Also trust on me should come by my last years profit chart(next slide).Page 7 Copyright 2012 21G Investments. All rights reserved. 8. Statistics Below are the statistics for the performance of last year IPOs in Indian StockMarket and my performance. [Refer slide 9 for the chart] Number of IPOs from Mar 2010 to Mar 2011- 60 Number of IPOs Currently trading below their issue price - 44 Number of IPOs currently trading above their issue Price- 16My Investments and Returns Number of IPOs from Mar 2010 to Mar 2011- 60 Number of IPOs my company applied for - 21 Number of IPOs in which we made money - 18 Number of IPOs in which we lost money 3 [Refer slide 10 for the chart]Page 8Copyright 2012 21G Investments. All rights reserved. 9. Blindly investing in IPOs &amp; keeping the money locked in DEMAT without evaluating thecompany profile &amp; growth sector may restrict your profit earning to around 27% which is asbad as gambling.Page 9Copyright 2012 21G Investments. All rights reserved. 10. Page 10 Copyright 2012 21G Investments. All rights reserved. 11. Statistics contd.. My total Return on Investment - 33% I have made around 1.94 INR lakhs during that period from IPOsby investing 6 lacs INR.Scenario If the invested amount is 4 lacs INR the return on investment will be 1.32 lac INR (assuming the previous performance is repeated).So by making 20-25 transactions a year we can generate 1.32 INR cash.Page 11Copyright 2012 21G Investments. All rights reserved. 12. Do You Have Any Questions? For further assistance: Gaurav Verma 21G Investments bullndbear@gmail.comPage 12 Copyright 2012 21G Investments. All rights reserved. </p>

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