How can I invest in IPO | IPO Week | IPO | Finance Talks with Sky

This week has been very anticipating for all investors as awaiting companies have issued the offers for Initial Public Offerings (IPO) which includes one of the giants in the Indian Market and it has launched its IPO after 20 years! Do read the blog and tell us in the comments if have you subscribed to any of these IPOs? If you missed this time or you don't know anything about IPO, don't worry we have got your back. 

What is an IPO?

Initial Public Offering is abbreviated as IPO. IPO is the process of raising funds by organizations to expand their business operations such as acquiring other firms, purchase of assets, etc. The funds are raised by the public as well as institutions by listing the company's shares on the stock exchange such as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). IPO is allotted by the registrars of the stock exchange to the investors, it is random and we can say it is like a lucky draw. The company its provides shares to the investors in exchange for funds.

When an investor invests in an IPO that process is called subscribing to the IPO. There are three types of investors who invest in IPOs are,  

1. Retail Investors aka small Non-Institutional Investors (sNII) 

2. High Net Worth Individuals (HNI) aka big Non-Institutional Investors (bNII) 

3. Institutional Investors (Major Financial Institutions such as banks)

The IPOs are issued at the predecided price by the investment banks and as per the demand of the company and the situation of the market, the prices are changed. These prices are called Grey Market Premium (GMP). If the GMP of the IPO is increasing then it is said the company is going to list at the premium. If the GMP of the IPO is decreasing then it is said the company is going to list at a discount. 

When investors subscribe to the IPO, their money is blocked in the form of the mandate till the date of allotment. If the application is allotted, the investor will receive the shares in their demat account. In case the the shares are not allotted then the whole invested amount will be refunded to the investors in their bank account. Retail Investors like us, can subscribe to IPOs with a required investment of Rs. 13000/- to Rs. 15000/- (based on IPO offer).

How to subscribe IPOs in India

The following things are required if you want to subscribe an IPO in Indian Market:

1. PAN CARD

2. Bank Account with the required fund

3. Demat Account

What are the benefits of Investing in an IPO?

There are several advantages of investing in an IPO, these benefits are mentioned below.

1. Liquidity - When the company goes public, the investor can sell all the shares any time required. There is no such bound of holding shares after listing and no need to block invested amounts for a long period of time.

2. Listing Gains - When the GMP of IPO increases, the listing price of the company is higher than the subscribed price. This provides investors a quick profit. 

3. Ownership in the company - When an investor holds a share of any company, even if it is just one share then they hold the ownership rights of the company such as voting rights.

4. Transparency - As the whole process of IPO is completed under the guidelines of the Security and Exchange Board of India (SEBI), the prospectus, financials, and plans are provided in true nature by the company for investors to make investment decisions. 

What are the Risks of Investing in IPOs?

As we have already said, every coin has two sides. Here is the same scenario. There are the following risks associated with investing in IPOs. 

1. Lack of Historical Data - As the company is not listed on the exchange, the initial information provided by the company is very little and that makes it difficult to decide if one can invest in the opportunity or not.

2. Market Volatility - The Stock Market is unpredictable, only some times the prediction is correct. Due to uncertainty in the market, there are chances of frequent changes in Grey Market Premium and that leads to changes in the price of the IPO. The investor can earn a huge profit or suffer a huge loss.

3. Lock Up Period - Though it is not for a very long period of time still there are chances if the subscription dates come close to weekends. So the money is blocked till the date of allotment.

4. Underperformance - There is no surety that the IPO will list in premium only, there are chances that the listing will be done at a discount. So there are two options for investors, either sell it in loss or hold the shares until it comes to Break Even or in profit.

Recent IPOs in the Indian Market

A total of 5 companies issued the IPOs for the public, they were Tata Technologies, Flair Writing, Fedbank Financial, Gandhar Oil Refinery, and Indian Renewable Energy Development Agency Ltd. All five IPO offerings are oversubscribed! Let's Take a look at all of them one by one.

1. Tata Technologies

Tata Technologies offered the issue of 6.09 crore shares with the issue of Rs. 3,042.51 Crore. The bidding of the IPO started on November 22, 2023, and ended on November 24, 2023. The allotment for Tata Technologies is expected on Thursday, November 30, 2023. The Tata Group has issued fresh offerings after 20 Years, which turned out to be a huge success as it has oversubscribed 70 times! 

The price band for Tata Technologies is set at Rs. 475/- to Rs. 500/- per share. The lot size for the application is 30 shares. The lot size for small Non-Institutional Investors was 14 lots (420 Shares) and for big Non-Institutional Investors (HNIs) was 67 lots (2010 Shares). The shares are going to be listed on NSE and BSE.

Refunds will be initiated on December 1, 2023. The listing date of TATA Technologies is December 5, 2023.

2. Flair Writing Industries Limited

Flair Writing Industries Limited offered the issue of 1.95 crore shares (Fresh Issue and Offer for Sale) with the issue of Rs. 593 Crore. The bidding of the IPO started on November 22, 2023, and ended on November 24, 2023. The allotment for Flair Writing Industries is expected on Thursday, November 30, 2023. It has oversubscribed 49.28 times! 

The price band for Flair Writing Industries is set at Rs. 288/- to Rs. 304/- per share. The lot size for the application is 49 shares. The lot size for small Non-Institutional Investors was 14 lots (686 Shares) and for big Non-Institutional Investors (HNIs) was 68 lots (3332 Shares). The shares are going to be listed on NSE and BSE.

Refunds will be initiated on December 1, 2023. The listing date of Flair Writing Industries is December 5, 2023.

3. Fedbank Financial Services Limited

Fedbank Financial Services Limited offered the issue of 7.81 crore shares (Fresh Issue and Offer for Sale) with the issue of Rs. 1092.6 Crore. The bidding of the IPO started on November 22, 2023, and ended on November 24, 2023. The allotment for Fedbank Financial Services is expected on Thursday, November 30, 2023. It has oversubscribed 2.24 times! 

The price band for Fedbank Financial Services is set at Rs. 133/- to Rs. 140/- per share. The lot size for the application is 107 shares. The lot size for small Non-Institutional Investors was 14 lots (7169 Shares) and for big Non-Institutional Investors (HNIs) was 68 lots (3332 Shares). The shares are going to be listed on NSE and BSE.

Refunds will be initiated on December 1, 2023. The listing date of Fedbank Financial Services is December 5, 2023.

4. Gandhar Oil Refinery Limited

Gandhar Oil Refinery Limited offered the issue of 2.97 crore shares (Fresh Issue and Offer for Sale) with the issue of Rs. 500.69 Crore. The bidding of the IPO started on November 22, 2023, and ended on November 24, 2023. The allotment for Gandhar Oil Refinery Limited is expected on Thursday, November 30, 2023. It has oversubscribed 65.63 times!

The price band for Gandhar Oil Refinery Limited is set at Rs. 160/- to Rs. 169/- per share. The lot size for the application is 88 shares. The lot size for small Non-Institutional Investors was 14 lots (1232 Shares) and for big Non-Institutional Investors (HNIs) was 68 lots (5984 Shares). The shares are going to be listed on NSE and BSE.

Refunds will be initiated on December 1, 2023. The listing date of Gandhar Oil Refinery Limited is December 5, 2023.

5. Indian Renewable Energy Development Agency Limited 

Indian Renewable Energy Development Agency  Limited offered the issue of 67.2 crore shares (Fresh Issue and Offer for Sale) with the issue of Rs. 2150.21 Crore. The bidding of the IPO started on November 21, 2023, and ended on November 23, 2023. The allotment for Indian Renewable Energy Development Agency Limited is expected on Wednesday, November 29, 2023. It has oversubscribed 38.80 times!

The price band for Indian Renewable Energy Development Agency Limited is set at Rs. 30/- to Rs. 32/- per share. The lot size for the application is 88 shares. The lot size for small Non-Institutional Investors was 14 lots (1232 Shares) and for big Non-Institutional Investors (HNIs) was 68 lots (5984 Shares). The shares are going to be listed on NSE and BSE.

Refunds will be initiated on November 30, 2023. The listing date of Indian Renewable Energy Development Agency Limited is December 4, 2023.

So, these were the 5 IPOs issued this week and the results will be seen in the coming days that what the result would be. Do comment and tell us which IPOs you have subscribed.

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