IPO's

           Initial public offering is the process by which a private company can go public by sale of its stocks to general public. It could be a new, young company or an old company which decides to be listed on an exchange and hence goes public.

Companies can raise equity capital through IPO’s by issuing new shares to the public. Once issuing the shares to public those companies called public limited campiness.

Example: XYZ textiles pvt ltd company and they making profits well but now they want to expand their business in other states, now they need capital to expand so they decided to go for IPO (initial public offering) to dilute the ownership into public. Now the company has value of 10 lacks and they divided into no.of shares using face value.

X  No of shares = 1000000 / 10

No of shares =100000

Each share value = 10 rs.

XYZ will issue the 50% of shares to the public means (50 k of shares), you will collect 5 lacks from the public and will use that money to your company expansion. Check below image how ipo thought will come to company.

IPO Thought Process:

Who can invest: everybody like Me, You, Your father, Your GF or BF (as the case might be) your neighbour, your maid, or any other you know.

What kind of returns we can expect in the market, here we can see below image of last one year ipo’s releases and its performance.

Here we have the list of good returns from Ipo’s for understanding.

If you can observe above image, you can see the returns from the Ipo’s. Everywhere profit is there means risk also is there, sometime the listing price will be less than offer price, means you will lose your money form the market .when you are investing in ipo’s also make sure you need to look the fundamentals of company and goodwill in the market.

I think you have some queries about ipo’s investment like how much we need to invest and how we can buy these ipo’s in the market.

Ipo’s always release in slots wise so we need to buy it in slots, (i.e. 1 slot = approx. 15000), as per recent releases of ipo’s the investment range from 14000-15000 per slot.

Where can I apply: if you want to buy ipo’s you should have demat account, you will get service from the brokers or you can apply from internet banking also .in your net banking we have option ASBA option , there you can have the online application form filling for ipo’s.

Here you can see the below image for applying ipo’s through net banking, I consider my SBI bank for buying ipo’s but my demat with different broker.

Through this process you can buy, once shares bought from the market it’s will delivered to you DEMAT account and once ipo’s completed those shares will register in exchange (NSE, BSE) for trading into the market.

Once stocks hit into market you can see the price movements and there you can sell otherwise you can hold till you want. You can see below image.

Isn’t it so simple and realistic to learn or earn.

Thank you for your time.

Apologies for any typos.