REL power IPO with loan

kpp · #1 11th January 2008, 12:47 PM

hi

i have taken some loan to apply for coming rel power ipo.

please tell me is it a good idea to play with loan money in rel power ipo ?

what are chances of allotment if applied for 1 lac limit?

will i be able to sell shares on listing day if I apply by paying 25% of application (I guess shares are not alloted in demat by registrar until ful payment done) ?

I'm sure there are many guys like me with similar questions.

your comments/answers/views are most welcomed.

NILKANTH KORANNE · #2 11th January 2008, 06:56 PM

Not a good idea to go for investment in IPO by availing Loan as No Guarantee about how many shares will be alloted.
Secondly, you have to pay interest from the date of availment of loan till payment. I think you should feed lucky even if you get 15 shares.
Thirdly, with Part Payemnt, unless you pay the full amount, shares will not available in your dmat account. Then, you can't sell it.

srihari_yerra · #3 11th January 2008, 08:22 PM

IF U R TAKING PERSONAL LOAN WHERE 18% is average Rate with different Banks then for One Lakh U have to Pay around 10k PA + Processing fee 3% + Preclosing 3%

that means u have to pay at the end of 1st month

Rate Per month = 10000/12= 900
Processing fee =3% =3000
closing fee =3% =3000
-------------------------------
Total 6900
_____________________________

considering u will close the loan in one month.

If RPL oversubscribes more than by 15 then , chances of getting per lakh shares willl be just 15 on lottery basis.

so profit u get on 1 lakh investment is 15*400(considering the current Premium stats) =6000

so u will end up loss of Rs 900 ..

u can take the call.......

v_sadanand · #4 13th January 2008, 12:15 AM

Taking a personal loan to apply for an IPO is a wild goose chase. The probability of allotment would be less if RIL Power oversubscribes and it is bound to oversubscribe.

So be careful in future....do a good risk management of yourselves before you start with this wild and risky adventure.

Sadanand

nitinku5021a · #5 13th January 2008, 12:26 AM

well guys..i think we need to look at it differently....if somebody is going for Loan for Rel Power..i think its a profitable business...lets see

For 1 lac application :: Amount needed = around 26k ( part payment )
as rel power is a big issue ( around 12000 crore / 4 ( for part payment) )
we can hope to get 20k allotment ( Am i too optimistic ?? ).

rest of the calc is done in the above post...i hope its clear that it may be profitable with Rel Ipo.

Nitin

hidilip1975 · #6 13th January 2008, 05:18 PM

Hi KPP ,

Please note that in case of part payment even though it will show in your demat ac the amount of shares credited to your account if you get any hopefully ,you will not be able to trade in them till you pay in full .that process will get completed if r powe gets listed by first week of feb by first week of march.So you have to pay interest till then .

kpp · #7 14th January 2008, 04:23 PM

thanks your views.

it's bit risky, but need to take this step bcos didn't got allotment in all previous major IPOs so will try to apply with max. limit and see

by the way, which option would fetch better results, apply with part paid up 25% of amount or full payment (1 lac)??

AmoghG · #8 14th January 2008, 11:49 PM

Allotment criteria is the same, regardless of full payment or part payment.

Only that you would get to trade your shares from day of listing in case 1 but you will have to wait until you deposit remaining money to trade, in case 2.

HTH.