Why not everyone invest money in IPO instead of shares?

teluguswan · #1 16th January 2008, 09:27 PM

Why not everyone invest money on IPO instead of shares?

When people have money in their hands why dont they invest on IPO instead of shares. For example Reliance Power is starting the IPO with the Rs. 450 each and according to the market on the listing date share value will be 800 to 900 the same.

Then why dont every one invest on IPO to earn very fast with in the two to three months. Why what is this logic. People invest on shares but not on IPO . On the listing date every share is going to be high then why cant we invest money on IPO's. When iam having around 1 Lakh rupees with me doing nothing. Other than mutual funds i should go for ipo or shares give your answer in detail my dear friends

AmoghG · #2 16th January 2008, 11:01 PM

If everyone buys from the primary market, expecting very high listing gains, how will they sell it off from in the secondary market... there will be no buyers there.

There you have a proverbial chicken and egg situation.

v_sadanand · #3 17th January 2008, 12:00 AM

The probability of getting shares alloted would be very less.If the issue oversubscribes, very few of the investors would end up getting the shares in the primary market.

It is a question of one's choice. If you invest in IPO with a short term profit they you are speculating but not investing.

sadanand

teluguswan · #4 17th January 2008, 03:10 PM

What you said is also right but according to recent ipo i.e Reliance Power every one is saying it is 450 right now when the listing date comes it will be around 800 that means with the short duration one will get the price (enough)

When people have money in their hands doing nothing then they can invest on IPO or not. Later the share value may go down or up but the listing date will be high on that day we can sell.

one can do this investing money on IPO and at the listing date sell it. by paying full money not partial

suba_stocks · #5 17th January 2008, 05:42 PM

Quote:

Originally Posted by teluguswan

What you said is also right but according to recent ipo i.e Reliance Power every one is saying it is 450 right now when the listing date comes it will be around 800 that means with the short duration one will get the price (enough)

When people have money in their hands doing nothing then they can invest on IPO or not. Later the share value may go down or up but the listing date will be high on that day we can sell.

one can do this investing money on IPO and at the listing date sell it. by paying full money not partial

i am not sure whether you know answer to these following questions...

how many people get allotment of ipo

how many days your money get locked.

what happens if you don't get any single share...

by answering above questions you will come to know why people don't invest in ipo even if they have money.

regards
suba

surfingminds · #6 17th January 2008, 06:45 PM

experienced people do earn enough in secondary markets and don't need to lock their funds for all IPO's unless you have assurance of getting it and its at reasonable price. And their are many who just do IPO's.

So don't try to generalize every one is doing what suits to him. everthing happens in market. Trends come and go,, things keep on changing in this market
After all what matter is that what profits you take at the end of day.

Its not just one IPO give s you 450 to 800 matters always.

regards

teluguswan · #7 18th January 2008, 05:49 PM

Quote:

Originally Posted by suba_stocks

i am not sure whether you know answer to these following questions...

how many people get allotment of ipo

how many days your money get locked.

what happens if you don't get any single share...

by answering above questions you will come to know why people don't invest in ipo even if they have money.

regards
suba

please provide the answers i dont know the answers iam new to this shares even finance matters iam just a technical guy and by seeing the reliance power boom all over the india i came to know this shares and ipo only.

this reliance power is like now Tata's people car, i.e Nano

WildFire · #8 19th January 2008, 01:33 AM

Say you apply for 200 shares in reliance IPO = 86000(assuming 430 you apply) and you get say 10 shares which is worth of 4300. Even if the reliance opens with 860Rs you only make 4300Rs which means For 86000 investment of 1-2 months your return is 4300Rs.

Not all shares open double the issue price, so if it's not a big profit, some goes down the issue prices on the same day or after 2 days of opening. Look at all IPO's last year you might see 50% shares trading less than theor issue price.

Make sense?

Radhakrishnan K.P. · #9 20th January 2008, 09:04 PM

Quote:

Originally Posted by WildFire

Say you apply for 200 shares in reliance IPO = 86000(assuming 430 you apply) and you get say 10 shares which is worth of 4300. Even if the reliance opens with 860Rs you only make 4300Rs which means For 86000 investment of 1-2 months your return is 4300Rs.

Not all shares open double the issue price, so if it's not a big profit, some goes down the issue prices on the same day or after 2 days of opening. Look at all IPO's last year you might see 50% shares trading less than theor issue price.

Make sense?

Yes you are correct.

If you are a long term investor watch the price movement after listing and then invest. That would be wise.

surfingminds · #10 20th January 2008, 09:10 PM

And most of the company take advantage of bull market to gather money through IPO. The question is how many of them can be trusted. How many could be successful in achieving what they promise.
Its different case when big names like reliance ask for money every one is ready to give them.