If you are a beginner in stock market , you would have seen that there are so many companies to invest.
The amount of recommendation of companies floating around by brokerage agencies is overwhelming. After investing in few and winning and losing in few of the recommendations , you may feel is it worth it to stay investing in stock markets
If you are a fundamental investor or technical trader you will find your way after some experience. For people who are getting their feet in , IPO’s provide the best and easiest way to enter into the stock market.
What do you need to invest in IPO’s
All you need to invest in an IPO is a sum of around 15,000 rupees, a bank account which gives to ASBA to apply to your demat account in zerodha( SBI, Axis, Bank of Baroda etc ). Whenever an IPO comes into the market , there will be a decent reviews by brokerage firms and analysis by finance experts. You will know beforehand whether the company is reasonably priced or not.
If the company IPO is good, the issue will be oversubscribed and you will your application will be selected based on draw / lottery system.
One more thing to note is the IPO applications can be done online using the ASBA facility which means the 15000 rs will stay in
your account unless you are allotted in the lottery.
In 2016 there were 26 IPO’s
In 2017 there are already 30 IPO’s listed as i write this
Performance tracker of IPO’s - http://www.chittorgarh.com/ipo/ipo_perf_tracker.asp
Now if we look at the recent history of IPO’s in 2017 , 21/30 IPO’s have positive listing , the stand out has been DMART started with IPO price at ~300 and it is trading now at ~1200 odd!!! a return of 4X. The surprising thing is it listed at 600 which is double the IPO price and has further doubled from there within this year.
As i mentioned earlier , the rest 9 IPO’s which didn’t make money were mostly bad fundamentally and a 5 Min review of there PAT and revenue would help you avoid those. You can even view reviews of these IPO’ on Chittorgarh or Chanakya - I am not aware if Zerodha has a blog for IPO’s
Please let me know if you guys have any doubts
Disclaimer: I am not a SEBI registered adviser. Please contact your financial adviser for before making any investment - Money Matters