Query About IPO,FPO and other PO

Hi

I am having some queries regarding IPO,FPO shares..

Lets say i buy a IPO or FPO share with price band b/w 201-205 and i have selected 205 as my limit

Assume i got the shares in book building process

Now after few days,the shares will be listed and it will be in my Demat account

The question is can i sell them on that day itself .. or is there any lock in period .. If there is a lock in period where it is specified ..?

And second query is about the premium shares .. I am often hearing that word that the shares got premium value after it is listed ..

I know that the premium means the value listed is very much more than the purchased value in IPO .. How exactly the share becomes premium considering the fact that the share has not been traded before ??

Who decided which shares are going to become premium .. can we predict that in advance ..?

Thanks in advance for the answers

Regards

Need Some advice here please

yes u can sell the shares on listing if u have them in ur demat account...usually takes 21 days after issue closing date...sebi is trying to reduce this time to 8 days by dec 2010...

premium or discount depends on
1)valuation of the issue compared to Listed peers
2)market environment...
3)issue size ...if the issue is very small people get very little allotment and they are willing to pay u more(premium) to get those shares...

these are some of the points that come to mind...

Normally there is no locking period for retail investor. If you get shares under employee /promotor / or any other quota then there might be lockin period.
But as a retail trader, you don't have such constraint.

It is just matter of presenting the info. If share is traded at price > issue price i.e. 205 then it is called at listing at premium.
If it gets listed < issue price , then it is listing at discount.

Demand/ Supply for that stock in Market decides the listing price and then trading price later on. Market sentiments affect the listing price to a large extent. And generally on listing, many people jump in to sell and book quick profit. Market players put the fair value to the stock and place their buy/sell orders accordingly.

hope this helps.
Happy Trading

I am little confused about this ...
As soon as the the company head rings the bell(i mean the start of listing in the share market),sometimes the starting price itself will be so high when compared to issue price..
This happens even when no trading has occurred itself ..
There has been no share trading involved in the past day .. so how can this rise instantaneously ??

This is because someone has placed first buy order in the queue to buy at such high price. So even if issue was at 205, no one stops me to place a buy order at 300..

Exactly same stuff happens everyday when we have Gap open. All nifty constituents will get first bid/ask order at price away from yesterday's price.. and that will decide the their first trade price. And nifty is just calculated from that price of each constituents.


This being a first day, there is no circuit limit otherwise we can't place a order with price beyond 5%, 10%, 20% of yesterday's close. That is why u will see wild move on day 1.
But from day 2, everything starts following