IPO for newbies

What is IPO?
Initial Public Offering, when a Company goes Public first time. Also called Primary Market.

Types of IPO?
1.Main Board: Safer IPO…Big Companies…1 lot maximum price 15K
2.SME: High risk…small companies…u may get Upper circuit as well as Lower circuit very often. Lot size minimum 1 lakh. (New comer stay away…bcoz good one less chance of allotment…bad one easily allotted)

Underlying portion of IPO:
1.Fresh Issues: New shares added, no body is exiting out of Company.
2.OFS: Offer for sale by PE (Private Equity), often Known as Smart/ Big money. Somebody is exiting out of Company.
3. Both partly Fresh Issue and partly OFS: Mixture of both.

Directly I will come to main Agenda…which one to apply and why? (Rest easily available in Google Baba)

For Listing Gains

  1. NIfty 50 doing well, means Market sentiment are good.
  2. See subscription in last day, if subscribed more than 5 times…go for it. But always make sure HNI subscribe it heavily…as they are the one who buy aggressively…so higher their subscription higher chances of listing Gain…(Ex. Salasar Techno…)
    3.Exit on first day itself…or book partial profit…Highest return from IPO came when you exit at first day.

For Long Term

  1. See the sector growth…see the company Growth…see Management…see government policy…social impact…
  2. Compare PE of Company with peers…if it is available cheaper…go for it
  3. Dont care too much for subscription…QIB is important…they invest for long term…if QIB is more than 1.5 times its a safer bet.
  4. Dont get panic if it come below allotted prices…But rather see quarterly reports…Observe Top line and Bottom line along with Debt to Equity ratio…(in short do fundamental analysis every quarter…if feel good buy more else EXIT)

How to maximize chances of Allotment? (Million Dollar question in IPO)

  1. Apply one lot at cut off or Cap price (highest).
    Why one lot… for allotment lot wise figures are combined and then allotted in proportion.
    See “basis of allotment” of any IPO…you will understand…people applying with 20 lakh capital gets
    nothing and someone with 15 k get one lot.
  2. Open demat account in name of your spouse…mother…father…Apply one lot from each…high chances
    u will get one lot in each ipo from any one of them.
  3. Link your FD in saving account (Many banks has this facility) so that u continue to earn high interest
    from FD…when allotted then only then it is broken…
  4. Dont get dishearten if if u r not allotted…keep applying…One Day U Will Get It.…people get on an average 1 IPO if they apply 4 IPO. (Number may vary…no discussion on this number)

Thanks for reading…It is only for education purpose…Please consult your Financial adviser before taking any decision.

Disclaimer: I made Good money in IPO :slight_smile:


If any body has any queries feel free ask…

Can you please elaborate on applying IPO from FD with an example?

I have Yes Bank saving Account…I make FD with option of SWEEP IN FACILITY. So, even ur balance is low…application will be accepted as UR FD has sweep in facility…same with Cheque…and ATM withdrawal.
Caution: Keep ur ATM safe…its in my home for long time…not in my wallet.

1 Like

Very good information provided by you! Its very usefull in short and sweet manner. Good keep posting here. Please give idea how to predict this IPO will be good for apply or not? I mean which factors we should consider?

1 Like

Thanks for your appreciation.

I only believe in number…why???..Numbers don’t Lie…You have 5 Apple…Apple may be fresh or rotten but one thing is DAMN sure that u have 5 Apple.

News, Expert opinions can be easily fabricated but when it comes to subscription numbers…which I believe tell the story…for Listing gain atleast…but for long term it is quite tricky as with large time frame many variable changes…so short term blindly believe in Subscription number…for long term regular tracking of fundamentals of company is necessary…

I hope u got ur answer…


Is it really true that if we apply for one lot we have best chance of allotment? Any references to learn more about it please?

see basis of allotment of any IPO…you will then appreciate the fact…

Yes Perfect! Thanks for good true and through Guideline.