Paras Defence And Space Technologies Limited IPO Message Board (Page 21)

lol you need to pay 10178+535=10713 for 192 profit
airtel looting own coustomer and investors ....

R P ji,
Thank you very much for your kind response. Others might not have any interest to respond. My intention in posting is to attract some healthy discussion on the drawbacks of the issue. Of course, everyone might be busy with discussing on abnormal subscription of PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED IPO. O.K. No problem.Thank you.

@ Kama sab
I know you are a very dedicated person.
This subject of Rights issue is important while the company is big and its accountability is beyond any doubt. In the last five years at least 65 companies have come with rights issue which includes companies like reliance, tata steel,bharti airtel, l&t f etc. etc .Even in this high market ,see the performance of others. Most have gone to dogs. For small and doubtful companies this is trap to catch innocents.
Basically, Rights issue does not give any benefit as it is a case of stake dilution.
In the earlier post a benefit of Rs192 has been shown which is not correct as because the value of the share will be reduced almost proportionately on the ex-date.so no gain. With the news of rights issue, some persons flock to buy it which increases the price of the share and it is an opportunistic time for exit. After allotment of rights shares number of free floating shares increase in the market and accordingly price comes down (just opposite to buy back where no of floating shares reduces in the entire process from the day placement taking place).
So its no gain.
Bharti Airtel came with rights issue in April 19 @ 220 with 19:67
Now market is high everything is looking fine.But that will not be the story for all time to come.
You may apply for rights issue if you already possess it but for reputed companies.
But for unreputed companies right issue means it will cause you heavy loss in future. You just study the history .
Now you may say that the right issue @200 for bharti is selling at 727.
Yes, this is the contribution of the market not the rights issue.
Thank you

Ashoke Sarkar ji,
I am grateful to you for your analytical views. What an elaborate study! Now the purpose of my post is served to the maximum extent ( as I believe so). I wholeheartedly appreciate your readiness to put forth your valuable post. God blesses you with all the best. I once again reiterate that I am in the process of learning n I thank you very much for sparing your precious time to help me to understand the issue better than what I understand earlier. Please continue to help the needy ones. Good night.

@Kama sir
I have forgotten one point
If you have share you must apply for rights issue otherwise you will be subject to the effect of stake dilution. You may also call for adjustment if you have large number.
You may apply for more than the stipulated ratio by which you will get larger number than the stipulated rate. This is because some persons do not apply for rights
issue whose part is distributed among the willing applicants. It is beneficial. You
will get some extra share at the rate of 535.
As I see it is a gross injustice for small share holders. Suppose a person who has five shares , his stake is diluted but he does not get any remedy.
This is not any equitable corporate action.
SEBI should revisit the norm, and put forth any rights issue should be 1:1
This will also be a problem as price difference will be small.
Good night

Dear Kamma Siva Ji
I am a bit late in answering as Airtel rights ex date is 27th and last date for buying was yesterday 23rd. Many have opined in this. Rights issues from a market leader in their industry are definite opportunities. Those who applied in Reliance , Tata Steel also benefited after a waiting period. Many corporates offer shares on private placement to FIIs or other portfolio companies. At times, they like their shareholders to benefit in future growth and earnings and propose rights at discount. In both cases there is equity dilution which does not affect on long term. Whenever a company issues bonus shares, the price falls immediately proportionately , but it rapidly catches up with earlier price with company''s growth. Take example of HCL tech with 1:1 bonus in Dec 2019 where in equity diluted two times with earnings per share halved. Cum bonus price around 1300 , that fell to 700 ex bonus. Today in 18 months , price is back to 1300, thus doubling the shareholders wealth. Several examples like Infosys, ITC, Ashok Leyland, Cipla .... abound. Similarly in rights issues with premium, though there is equity dilution , share premium is credited in share premium account and used to retire high cost debt or any pending payables to make the business more profitable. In case of Airtel , even if one bought cum rights 14 shares at 750, ex rights fall will be around 735 by calculation which is negligible. Airtel issued rights at 200 in 2019 and shareholders benefitted immensely in just 2 years. With the current changes in telecom policy and expected growth, Airtel can cross over 1000 on a longer timespan. One can''t attribute increase and benefits in share price from past rights issues to current share market bull run alone. Else all shares fall in that category. For a conservative investor willing to wait long term and create wealth rights issues are an opportunity. There will be varied opinions on long term. Most on this board consider long term is about 1 to 3 years. In realty any business picks up only in 1 to 3 years. Long term wealth creation requires anywhere between 5 to 15 years. This is time needed to create large wealth. Trust this gives some idea on the investment.

Finally if you wish to try and test out , do buy 1 or 2 shares of SRF limited another high growth company. Current price is cum bonus 4:1, that is for every share you will end up with 5. Price will fall steeply proportionately for short while. I expect the price to double from ex bonus in a years time as SRF is high growth now. There is also possibility of price going up 5 to 10% on announcement of record date. This is a wealth creating company on long term

@Ou Ai, I fully agree with you on your detailed analysis and explaining the rights/bonus issues of Top Tier companies. Really appreciated, this is very helpful for the people who wants to have long term investment goals (though this may not work on for very short term or if market fall). Airtel certainly a great company, potentially will grow much higher in long term with this big rights issue

Thanks

Asoke Sarkar ji,
I once again thank you very much for your consideration to explain the leftover ( in your opinion) item. I don’t have any Bharti Airtel shares. In fact I thought that any discussion over the issue would be helpful to the readers like me. Hence, my post. God blesses you with all the best. Keep posting n enlighten.

Ou Ai ji,
We, the readers of the forum are very fortunate to have great, kindhearted n admirable and knowledgeable gems like you. Really, we are very proud to have the exemplary personalities like you. I bow down n express my gratitude for your consideration n kindness to enlighten. I appreciate your kind of illustrative analysis of both the Rights n Bonus issues. Sharing enhances your……I have taken note of the views n suggestions. Of course many readers might also have been benefitted. Please continue to do so. God blesses you with all the best. Thank you.

@Asoke Da and Ou Ai,

You have very nicely explained the process of a Rights Issue and its after-effects. Thanks for same.

@ OU Ai
Thank you for the excellent write up.
Your experience matches with mine and it is faultless when long term view is concerned. But, I have a difficulty. I think,for long term I have also long term in hand. For long term investment ,
run and buy is never any good idea. One have to wait , catch it while rolling and that too in parts.
My response concerned whether anybody should buy it with the news and the relevant depiction in the short term . I think this news gives a trading opportunity in the short term which should be used by experienced persons. Moreover, I tried to give a general view.
Bonus issue does not require any payment . So there is no question of any decision. Rights issue reguires payment to supplement the stake dilution effect. There may be some benefits in the short term as I have mentioned earlier.
IN FINE, I SAY THAT WHOSOEVER HAS BOUGHT BHARTI SHARE EVEN TODAY WILL BE ELIGIBLE FOR RIGHTS ISSUE AS THE EX-DATE IS THE 27TH INSTANT AND RECORD DATE IS 28TH.
Thank you
.

@KAMMA SIVA RAMA KRISHNA Sir,

Sir, Any update on Nucleus Software Buyback? Also please let us know should we participate or not.

Thank you for your guidance, you are also one of the gem on this forum. I like your attitude of knowledge sharing and your polite way of replying.

Thanks Sarkar Ji
On reading your response, especially the details in BOLD that record date as 28th, I stand corrected. As I read this message ten minutes before market closure, I purchased Airtel to avail rights issue. I expect the Airtel to move to 1000 and above post right issue. Only 3% of shares are held by retail public.
Thanks again!

Rahulagg ji,

Aniket ji has kindly posted his valuable views in this regard with reference to the request made by Patel ji. I always follow his precious suggestions. I have nothing to add or contradict. Thank you.

DRS - Lets wait for outcome of meeting. If buyback is through Tender offer than it will be beneficial otherwise if its through Open market than its not.

Still feedback from Aniket ji and Kamma ji is appreciated.

I am still in the process of learning only. Aniket ji is the best one to express his valuable views in this regard. However, I humbly submit the following within my limitations with the thought that it may be helpful at least to some extent to the new entrant.
1. During my experience I have learnt that one should not hastily purchase the shares without having the details like Mode of Buyback, Quantum of buyback, Price of the buyback etc.,
2. It will be normally better to wait for a reasonable period (within a week) for settlement of the Market price to purchase the shares even on knowing the outcome of the board meeting instead of hurriedly purchasing on the day of the meeting as the Market price on the day and the subsequent one or two days will normally be a bit more due to heavy demand for purchasing.
3. It will be normally better to wait for a reasonable period at least for a couple of days for settlement of the Market price to sell the unaccepted shares after the buyback due to heavy pressure of selling on the day one or two of the receipt back of the unaccepted shares in the d mat account.
I also join to pray for the kind guidance of Aniket ji at the earliest on knowing the details of the buyback. Thank you.

Patel Bhai is correct. Buyback is good or not, we will come to know after meeting only. Depends upon BB route, BB size and the price at which BB happening.
Mostly tender route with good premium and good size is beneficial, but sometimes open market BB is also good opportunity.
An example of this Infosys. It was little down after its revealed the BB is open market. I bought it around 1330-40, even after know its Open market. Bought it just bcoz BB size is huge of 9000Cr. Knew that when such amount will bought back price is bound to move up. Thought, that will sell around 1550-1600, as it is good swing trade. But it moved up quite fast with momentum, to even 1750. Book partial profit at 1700 and still holding some to book at 1750.

BUT Nucleus is small cap. So dont think here open market will be any good as BB size will be small too.

@ KSR Krishna,
I appreciate your knowledge sharing attitude.

I am touched by your words of appreciation. Thank you very much n all the best.

Main reason : A very small amount issue.
Refund received from past isse.
No confirm date of any good issue.
GMP is seen very high.

Thanks PKRAJ.
But very sorry that I didn’t get u properly. My query regarding “should we buy on listing day” is still not resolved. It seems that it is going to list at very high price … 😊

@Sam, I see that PH Raj has answered you indirectly. though you answered already, my personal opinion, unless you are a risk taker, don''t buy this on listing, looks like its going to create a record, wait for few days if you believe in its value.

disclosure: Heavily invested in this IPO, will surely get 4 Lots (Guess how much I put in)

Thanks

typo, please read as PK Raj, apologies

@MR,
No prizes for guessing....you are going to be a proud owner of some 356 shares.
Congratulations !!!

@Eklavya, thank you and I will hold them for long term. good luck to you for Paras allotment

Thanks

Thanks so much Mr. MR.

Thanks, Ravi...All The Best for Allotment

Can anyone guide me.....today I got a message that my holding amoung is removed.....Why ?

@MRavichandran: It seems you are NRI. By chance did you apply for freshworks Nasdaq IPO?

Same as someone applied 800 or 15!!
.
.
If you apply less lot than NII subscription, it''s a lottery system

295 is less than 927
chances are max 1 lot, that too on lottery basis

@stupid guy: better not to reply if you are not aware....

@suneel:
your chances are 295/927 means approx 32% chances , means if 10 people applied for 295 lots then 3 will get 1 lot from those 10 people....

its lottery below 927 lots and but its not single lottery for all....lottery will be there for each category based on their application size.....and as per ratio, some lucky ones will get 1 lot....
means some who applied 460 lots is having 50% chances and someone who applied 310 lots is having 1 out of 3 chances....

Thankyou very much @Lokes.
This logic makes sense. Else, there is no value for people who are applying 500 lots vs 15 lots. Everyone can apply 15 lots, like retail applying 1 lot.

Thanks again.

@lokes
He has applied less than 927. So it will be lottery. And during lottery, his will be considered one application. Number of Lots doesn''t matter.
.
Though you maybe right! I am just stupid!

What is the use of applying for so many lots when you may finally manage to get 1 lot only. Even if the stock lists at 300 premium, you make only 0.185 % on the overall money blocked for more than a week''s time. If you have taken loan by paying interest, then your earning may actually be negative. Just put that money in some good stock like Lakshmi Organics or Easy trip or any other one in secondary market, you can easily earn lot more money in just a day ? I simply don''t understand the logic of your applying. Correct me if my calculations are wrong.

@Suneel Padavala,
Sorry, you applied for 295 lots. Still you will make only 0.58%. That''s abysmal.

@ipobull,
I agree with your logic of returns of 15K to 20K for investment of 45 Lakhs in one week time. However, with this approach I''m not losing my capital, and in Secondary market at historical highs, there is a risk that we may lose capital. That too with Midcaps, risk is very high.

Still, you can always rely in rock solid mid companies with proven financial track record. I can name many other stocks like the recent ones like GR Infra, which I purchased @ 1630 after seeing its results. Now its around 2000.

@stupid guy: again let me repeat you.... better to keep quite when you don''t know something instead of giving wrong info just for the sake of replying....

@ipobull: I have seen your many such posts where you keep saying long term, short term and these stocks and reliance, hdfc etc etc....let me tell you only one thing , nothing is sure in secondary market in any share in short term...no one can even predict about even one day or any share where this kind of IPOs it''s sure shot return if we get and anyways money getting interest in bank if we don''t get in hni, every one don''t want to take risk like you now in secondary market...and some may be more money left even after investing in secondary market so it doesn''t mean that everyone should put all his money in market only, it''s everyone''s own choice and risk taking capacity...hope u will understand.

@Stupid G
Why can''t you read basis of allotment of old IPOs ?
It will help you to understand how allotment happens for HNI category.
Don''t post anything which you know without proper study, because you are not correct.

@lokes, nicely explained

Thanks