IPO-slaughter house

mastermind007

Well-Known Member
#21
Do you remember the IPO of INOX WIND that had come sometime in last year that was over-subscribed? Did you find it in any of its listing documents that the company had completely destroyed ecology/economy/livelihood of a small village in Gujarat. Name of the village is Nathkuva and some scant details of problems can be found in American and British newspapers. There are few NGOs in vicinity of that village that beat around the "woman empowerment" bush and admit the problem but claim helplessness. If you read the IPO documents, you'd be told that the company is environment conscious and even boast of a "star rating" given by some bureaucratic machinery. All those who bang on "protecting environment around them" bandwagon go completely deaf when you talk about it.
 

mastermind007

Well-Known Member
#22
It is inevitable. I too would do the exact same thing if I had the shares. All of those private equity holders were waiting for listing to sell their stocks in market. Almost everyone of them has gotten the same shares at below listing price.
 
#25
Even established groups, price their IPOs very high. Reliance Power, for example, is still trading at less than a fifth of its IPO price. Most of the analysts recommended. So many MFs have subscribed. Of course, it is not their money, anyway. The point is, they either do not have the competence to assess or there were considerations other than making money for the investors. Reason is, it was very easy to see that IPO was super highly valued. I took Reliance Power IPO because it was the largest IPO then, coming from so called investor friendly and most successful group.
No matter what, you need to check out the IPO valuations yourself.
 
#26
Even established groups, price their IPOs very high. Reliance Power, for example, is still trading at less than a fifth of its IPO price. Most of the analysts recommended. So many MFs have subscribed. Of course, it is not their money, anyway. The point is, they either do not have the competence to assess or there were considerations other than making money for the investors. Reason is, it was very easy to see that IPO was super highly valued. I took Reliance Power IPO because it was the largest IPO then, coming from so called investor friendly and most successful group.
No matter what, you need to check out the IPO valuations yourself.
Didi you check the RPower IPO valuation? It was not an established company, it had not started operations. Everything would be green field.
Please look at what Parag Parikh told about IPOs
 
#27
Didi you check the RPower IPO valuation? It was not an established company, it had not started operations. Everything would be green field.
Please look at what Parag Parikh told about IPOs
The most astonishing part of RPower was the ipo issue time...by the time us market was about to plunge...the timing was so perfect....january 2008... market was just peaked....and then they issued bonus as well...why bonus...look at the price now. they said these are the people that has made the people well off. The captain of the industry.
 

sumantra

Active Member
#28
Any company, before entering IPO market, does lot of window dressing on their accounting books and at least for a short while, their overall practices looks better than what is written in commerce textbooks. Kinda like, how folks decorate house during Diwali. Doing "due diligence" and reading all that fine print will usually reveal nothing alarming or bad.

NOW FOR SOME PRACTICAL/USABLE/EFFICIENT APPROACH based on FACTS

FACT: As a matter of practice, companies do provide shares to individuals on private basis prior to IPO.

In 1990s-2000s, the IPO was always at the face value of the share and 90% of shares had face value of 10 regardless of its book value and minimum purchase quantity was 100. Company whose book value was below face value had practically no subscription chances and the fundamental rule that "market price will approach book value"

Hence, in most IPOs, prices used to rise immediately after listing. This made trading in IPO very very attractive. I too had doubled my own meagre capital of 1000 rs 3 times in row. Strategy: Buy in IPO. Sell off on 2nd or 3rd day of listing

Nowadays, with offer price much above face value, probability of those pre-IPO share owners wanting to book profit is very high and hence chances of price dropping is very high. Many of them want to cash in on listing.

If you want to play IPO now, assuming you have ample time to do your "due diligence", either approach the IPO-ing company and try to (legally) avail the pre-IPO shares privately or find opportunity to Short at listing.
good information.