Have you invested in IPO’s which gave 65% returns in last 9 months?

Have you invested in IPO’s which gave 65% returns in last 9 monthsHave you invested in IPO’s which gave 65% returns in last 9 months?

In the last 9 months, there were 18 IPO’s which came to public for subscription and almost all of them are performing well in terms of returns. In this article I would discuss about IPO investments and the performance of IPO’s in India in the last 9 months (Jan-2013 to Sep-2013) and how it provided excellent returns to investors among various best investment options.

IPO Investments in India

Investors always look for best investment options which give quick returns. Investment in stocks in the secondary market has always been high risk. The alternative option of direct investment in stocks is through an Initial Public Offering. Initial Public Offerings (IPO) generally help investors in choosing a stock for investment and gaining in the short term through listing gains, medium term and in the long term.

Also Read: GRT Flexi Gold Plan – Should you invest?

I personally invested in Repco Home Finance Ltd where I recommended to buy on this blog and the IPO is 55% up as of today.

My last recommendation to buy during Sep-13 was RJ Biotech which gave solid returns of 144% in just 1 month. With a minimum investment of Rs 120,000, one would have made a profit of Rs 172,500 in this scrip. I repeat, it is just profit of Rs 172,500.

Some of the IPO’s have made 250%+ returns where I have NOT recommended to buy. Investors are also investing in companies which have not been doing well or its Financials are not attractive.  

Highlights of IPO Investment performance from Jan-13 to Sep-13.

1)   There were 18 companies which came for an IPO from Jan-2013 to Sep-2013 including SME IPO’s.

2)   IPO’s have yielded good returns to the investors. The majority of them are trading at a price which is higher than the issue price.

3)   3 IPO’s, OneSource Tech, Silver Point and Alacrity Securities have yielded loss to the investors. They are trading at below the issue price (loss of 42% on average).

4)   Assuming that an investor have invested minimum investment required for the IPO in all these 18 IPO’s, your investment value would have been Rs 19.36 lakhs and you would have made a profit of Rs 12.52 lakhs in the last 9 months. This indicates that 65% returns in a 9 month period.

5)   Though there are several brokerage houses recommend not to invest in specific IPO’s, investors have been investing in IPO’s to earn profits from listing gains. Though this strategy might be good for listing gains, you cannot hold IPO’s which are not attractive for short to medium term. The classic example is Onesource Tech which lost 68% from its issue price.

IPO investment performance in the last 9 months from Jan-13 to Sep-13

Also Read: Want to manage your finances, learn from your mother

Conclusion: IPO investments in India have been given good returns in the last 2 years. However one should not forget about IPO investment performance in 2011 where investors had suffered heavy loss by investing in IPO’s. Investing in good IPO’s would always benefit in the long run even in case of negative market sentiments.

Readers, what are your experiences in IPO investments?

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Suresh
Have you invested in IPO’s which gave 65% returns in last 9 months

Suresh KP

15 comments

  • Piyush P

    Dear Sir

    I an a begineer and learning / understanding market trends. I want to open a Demat A/c where operational charges are quite less. Kindly suggest which bank A/c should I prefer.

    I want to invest a very less amount initially in share market say Rs 10k max for a sapn of 10 years. How is Suzlon Energy share ? kindly suggest. 

    Kindly suggest few more stocks as well.

     

    With regards

    Piyush P

    • Piyush, Read our famous article on how to choose a broker for demat account. https://myinvestmentideas.com/2013/02/how-to-choose-a-good-broker-for-demat-account-services/

  • SANTOSH

    Hi Suresh,

    As you mentioned in one of the posts above  , that all IPOs dont get posted on brokers account , for ex  ICICI direct .  For most of the IPOs you researchd and analysed in 2013 were not there in ICICIdirect. in such a scneraio . can you recommend  which broker account to go for ..in online mode . where majority of the IPOs get listed?

    Also in order to understand fundamentals of  IPOs in detail  , any good reference material , links etc if you can provide , would be very helpful. Of course this blog of yours has lots of information!!!

    and would be really helpful if you can provide the IPO Analysis in this blog before the issue closes.

    Thank you!

    • Santosh, I agree with you that ICICIdirect.com is not supporting for all IPO’s. This is happening mainly for SME IPO’s. However I heard majority of brokers are providing this option. When you opt for it, just check whether they are supporting for SME IPO’s. This is a good check point. Regd reference material it is difficult to comment. Many blogs give different opinions based on their experience. Yes, I generally provide atleast 2 days in advance about any new IPO’s.

  • Arbab Sikander

    Hai Suresh, Good articale about the IPO. I wanted to know how to invest in IPO on line. I have Demat account and i check for the IPOs, but it shows the old closed IPO. How to invest in new IPO.

    • Arbab, Keep visiting our blog. Once a new IPO comes, we would provide the analysis along with start date and end date of IPO. During that period you can subscribe for IPO’s. However some of the SME IPO’s are not being listed for “buying” in all brokers accounts. e.g. I came to know that some of the SME IPO’s are not getting listed in ICICIdirect.com. When the IPO’s are open for subscription, login to your demat account and check the availability in your broker’s account. There are special links to invest in IPO, you just need to enter Qty and submit.

  • Kishore

    Hello Suresh,

    I'm always reading all your IPO listing analysis. But what to do I'm in a situation where I cannot invest 1lakh rupees as a lump sum 🙁 most of the recent IPO's which are good are coming with minimum 1lakh contribution.
    I've a doubt here once we aquire the shares through IPO… when we can sell them in market back again? Is there any time limit that we have to keep them or any mandatory instructions that we should not sell in a time period?
    For example is it possible to sell RJ biotech shares now what you are holding?

    Please let me know

    Thank you

    Kishore B

    • Kishore, Even I am in same boat. If minimum investments are removed, it would be always better. If you see these are specifically for SME IPO’s. I have invested less than this amount in REPCO home finance IPO and we can protect our capital by investing smaller amounts in several IPO’s. Regd your other query, the day when it gets listed on Stock exchanges, you can sell them. The only challenge could be there should not be “sellers only”. In such situation, Share price would fall and you would get lower amount. Ideally we should check for 1-2 months or 30% minimum amount before we book profit. This is how I see. 

      • Kishore

        Thank you Suresh for clearing my doubt and I'll plan accordingly for the upcoming IPO's. If you have time why don't you give us your valuable suggestions on Shares too ? List some good shares to invest in small amounts.

        Thank you

        Kishore

  • rajivahuja

    Almost all investors burned their hands in Reliance Power IPO.

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