Download ppt - Profits through IPO

Copyright © 2012 21G Investments. All rights reserved.

PROFITS THROUGH AN IPO

Page 1


WHAT IS AN IPOAn IPO or an initial public offering is the first sale of stock by a

company to the public. These are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.

It a process by which new company enters public markets or Stock Market to raise equity.

Page 2


WHAT IS AN IPO Contd..

Page 3

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.


How PROFIT IS BOOKED

Page 4

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.


Game Plan Put in as many applications as you can in an IPO that seems to give

a good return.

Return is estimated on the basis of difference of the price the IPO was offered to you and at the price IPO was opened as we sell the IPO on the listing day.

Profit = No. Of shares alloted *{(Price at which IPO opened)- (Price at which IPO was offered)}.

Therefore it becomes important to put in as many applications in order to increase the allotment even if the stock is oversubscribed.

Page 5


Requirements to apply for an IPO

Page 6

Must have a DEMAT account .

Maximum amount /application is 2 lacs INR. So, for 15 days you should have 2 INR lacs in your DEMAT account .

Since ICICI gives you a saving cum DEMAT account , for the time you are not investing you can get 3 % annual appreciation for your money.

1

2

3


FAQS

Page 7

Why 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 (India’s 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.

1

2Why trust me ?Trust 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).


Statistics Below are the statistics for the performance of last year IPO's in Indian Stock

Market and my performance. [Refer slide 9 for the chart]

Number of IPO's from Mar 2010 to Mar 2011- 60

Number of IPO's Currently trading below their issue price - 44

Number of IPO's currently trading above their issue Price- 16

My Investments and Returns Number of IPO's from Mar 2010 to Mar 2011- 60

Number of IPO's my company applied for - 21

Number of IPO's in which we made money - 18

Number of IPO's in which we lost money – 3 [Refer slide 10 for the chart]

Page 8

Copyright © 2012 21G Investments. All rights reserved. Page 9

Blindly investing in IPOs & keeping the money locked in DEMAT without evaluating the company profile & growth sector may restrict your profit earning to around 27% which is as bad as gambling.



Statistics contd..

My total Return on Investment - 33%

I have made around 1.94 INR lakhs during that period from IPO's by 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 11


For further assistance:Gaurav Verma21G [email protected]

Do You Have Any Questions?