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