How to Earn Money from IPO? | Share Market Knowledge | #Stock Market for Beginners

Investing in IPOs can be a lucrative way to make money, especially during a bull market. An IPO, or Initial Public Offering, occurs when a company offers its shares to the public for the first time. This year, several IPOs have been introduced, presenting investors with potential opportunities. By carefully analyzing and investing in these IPOs, you can potentially earn substantial returns.

One way to approach IPO investments is by researching the performance of past IPOs. Using platforms like the Angel1 app, you can track and evaluate the historical performance of IPOs. This data can provide insights into which IPOs have performed well and which ones may be worth considering.

It’s important to note that investing in IPOs carries risks, and thorough research is essential. Factors such as the company’s financials, business model, industry outlook, and market conditions should all be carefully assessed before making investment decisions.

Investing in IPOs can be an exciting opportunity for retail investors to potentially earn profits through listing gains. In the past year, a total of 43 IPOs have been introduced, presenting numerous investment options. Retail investors typically invest smaller amounts, often around 1 lakh, in the hope of securing listing gains.

One of the main challenges for retail investors is getting allotment in oversubscribed IPOs. When an IPO receives high demand, it becomes oversubscribed; meaning the number of shares available is insufficient to meet the demand. This can make it difficult for individual investors to secure their desired allocation. However, there are strategies and techniques to increase the chances of getting IPO allotments, such as applying through multiple demat accounts, applying in the non-institutional investor (NII) category, or using the ASBA facility provided by banks.

The concept of listing gains is crucial for IPO investors. Listing gain refers to the difference between the IPO price and the opening price of the stock on the day of listing. This gain can be positive or negative, depending on market conditions and investor sentiment. Investors aim to capitalize on positive listing gains by selling their shares at a higher price than the IPO price.

Investing in IPOs can be a mixed bag, with both positive and negative listing gains. Understanding the past performance of IPOs can provide valuable insights into the potential returns on investment. By analyzing historical data, we can observe the varying outcomes of different IPOs.

For instance, let’s consider the example of Aditya Birla Sun Life AMC Limited. If you had invested in this IPO, the listing gain would have been negative at -1.73%. This means that if you had bought shares during the IPO and sold them on the listing day, you would have incurred a loss of 1.73% on your investment. On the other hand, if you had invested in Paris Defense and Space Technologies Limited, you would have enjoyed a significant listing gain of 185%, resulting in a doubling of your investment.

These examples demonstrate the contrasting nature of listing gains. IPOs can offer both positive and negative returns, and it is crucial to conduct thorough research and analysis before making investment decisions. It’s essential to consider factors such as the company’s financial performance, market conditions, industry outlook, and overall investor sentiment.

Out of the 43 IPOs that have been introduced recently, there were 11 instances where investors would have faced losses. This highlights the importance of diversification and careful selection of IPOs. It’s vital to evaluate each IPO on its individual merits and assess its potential for future growth.

In the scenario you mentioned, out of the 43 IPOs, there were 11 instances where investors would have faced losses, resulting in an average loss of 6.09% on each investment. This translates to a loss of ₹66,000 if you consistently invested ₹1 lakh in each IPO. These losses may seem disheartening at first.

However, it’s crucial to also consider the instances where you made profits. From the remaining 32 IPOs, you profited on average by 47.4%. This means that if you invested ₹1 lakh on average in these profitable IPOs, you would have made an average profit of ₹47,000. When you multiply this by the 32 successful IPOs, it amounts to over ₹15 lakhs.

It’s important to note that you don’t need to invest in every IPO with a large sum of money. IPO investments can be made with varying amounts depending on available funds and individual preferences. Moreover, investors often have capital from previous successful IPO investments that can be reinvested in subsequent IPOs, enhancing their investment potential.

By carefully selecting IPOs, diversifying investments, and leveraging available funds, investors can navigate the IPO market more effectively. Thorough research, understanding market conditions, and seeking professional advice can further enhance the chances of profitable IPO investments.

Two key factors play a significant role in IPO investments. Firstly, understanding the company’s business model, financials, and prospects is crucial. Conducting thorough research helps assess the potential for future growth and profitability.

Secondly, evaluating market hype and oversubscription levels can indicate the demand and interest among investors. Platforms like Angel One provide data on oversubscription, allowing investors to gauge the level of interest in an IPO. This information can assist in predicting the potential listing gains.

By combining these factors and utilizing resources like the Angel One app, investors can make more informed choices. It’s important to note that there are no guarantees of success, and careful consideration of risk management is essential. Diversification, staying updated with market trends, and seeking professional advice when needed can further enhance investment strategies.

For instance, let’s consider an example using the ongoing IPO of PB fintech. The platform displays the subscription status, price band, lot size, and other important details. In this case, the subscription level is currently low, indicating that the chances of listing gains may be lower as well. By reviewing the subscription numbers of different investor categories like QIB and NII, investors can gauge the overall demand and interest in the IPO.

Additionally, the platform provides valuable information such as the issue size, investment amount, and retail category details. This allows retail investors to assess their investment options within the given limits and understand the potential financial implications.

By closely monitoring the subscription levels and comparing them to past trends, investors can make more informed decisions about participating in an IPO. It’s important to note that high subscription levels, especially in the retail category, can indicate a higher likelihood of listing gains. However, individual research and analysis are crucial in evaluating the fundamentals and prospects of the company issuing the IPO.