Power Finance Corporation Ltd FPO Message Board (Page 50)

I beg to differ with vas nat and gem. In some ipo there is always chance of loosing money if price decided is on higher side example sci, nmdc, orient power and most of the psu divestment which had a bad response. If these companies had used upper band than you stand to loose money example sci. If company fix price at lower band than you loose lesser or even make money example nmdc. Had we used cut off in such issue like sci, orient or lets say future and kishore biyani fixing 11... the losses would have been much higher than what it is in price bidding, in some cases. as far as pfc is concern, since there is 7-9 rs gap in future and spot and since there will be tepid response from retail as this aint a moid, psb or coal india, hyped and packed with dreams of high returns, its safe to take less risk.. get something or nothing. if we bid at 193, 197 and 203 and price is fixed 193, we get share at around 183, if we bud at cut off and pay 203 and god forbid qibs like lic and banks subscribe issue 100%, they'll get share at 203 but they'll short in future too.. but a small investor who dont know much about fno will get trapped like sci or nhpc. its perspective of getting either nothing or something and not losing money. play safe they say.

238 DEAR VAS NAT

AS SUCH YOU ARE CORRECT.....

BUT BY USING MULTIPLE OPTION, WE CAN INCREASE OUR ALLOTMENT CHANCES WITHOUT MAKING EXTRA EFFORTS OR PUTTING EXTRA MONEY (ALTHOUGH BENIFIT WILL BE ONLY IF THE PRICE BAND IS FINALISED LOWER, OTHERWISE WE WILL HAVE SAME ALLOTMENT AS IN THE CASE OF "CUT-OFF".

IN ANY CASE THIS FPO WILL BE SUBSCRIBED BY MORE THAN 1 TIMES AT UPPER BAND....

THERE IS NO QUESTION THAT RETAILERS CAN DECIDE THE PRICING ....

RETAILERS SHOULD USE APPLICATION MATRIX IN SUCH A WAY TO MAXIMISE THE CHANCE OF ALLOTMENT BY USING THE SAME AMOUNT...

BELIEVE ME FREINDS... USE ALL THE OPTIONS AS SUGGESTED BY ME AND YOU ARE NOT GOING TO LOOSE ANY THING.....

IF AT ALL (WHICH IS NOT ALWAYS THE CASE), COMPANY DECIDES TO FIX 197, 195 OR 193 , WE WILL GET SOME ADDITIONAL SHARES WITHOUT ANY EFFORTS...

In case you are sure you want only lesser tha certain rate then apply on certain price or the lower band. But if you surely want allotment, then apply in Cut off even though applying in higher band does not make a difference.

Madhur Kotharay - All retail applicants should apply in Cut-off only since this is an advantage only to retail bidders. Why not use them and help lower the final price?

Pain of applying in different price bands is for the QIBs and others. Why take trouble?

As GEM said this Cut off is a magic and pl use it.

Dear Vas Nat, if I give 3 bids, how are used by the company for price discovery? For example, for Muthoot:

Bid 1. 1240 shares at Rs 161
Bid 2. 1160 shares at Rs 172
Bid 3. 1120 shares at Rs 175
(I pay Rs 199640, which is highest of the three).

I think the company has to take my bid 1 for the calculation of indicative price. So in fact, by giving the lower price bid as the first one, I am helping bring down the final price.

Let me also join the discussion.

Retail applying at Cut off is advantageous to pull the price band down during price discovery and Retial applying at higher band is advantageous to the company to fix the final price higher.

During price discovery, applications under cut - off is separated and kept since all these bids gets qualified on price and the rest is considered for discovery of price. Bids get qualified starting from higher price band and then the next lower. The lowest rate at which the price gets qualified is made the discovered price and all bids higher than this are alloted shares on discovered price. The company may have the option to fix at lower price but not higher than the discovered price.

So overall, as far as allotment is considered retail applying at cut off or higher bid does not make a difference to the retail bidder except for helping the discovered price to be made lower.

I have put this to the best of my knowledge and corrections/comments are welcome. But strictly no abuses pl.

Dear CLD, there is a technical reason to give different prices for bids for retail investors. e.g. In case of Innoventive, who gave the shares at lower end of the band, you would get higher allotment for the same amount, if you had given separate bids. At the lower end of the band, you will get more shares. However, if you just gave 'cut-off', you will be asking for no of shares corresponding to the top end of the band.

Try this calculation. Yes, it is a bit confusing when explained in words as above. But if you take Rs 2 lakh as investment amount and calculate how many lots you can apply for, at lower to higher ends of the bands, you will see.

I have an excel sheet in which I do this calculation automatically. I find that there are typically 2 bids at Rs 50000, 3 bids for Rs 100000 and 4 bids for Rs 200000. For the latter, I always choose the highest price bid as the last and pick any two depending on my guess for the retail oversubscription.

BEST STRATEGY FOR RETAILERS FOR PFC FPO


OPTION QUANTITY PRICE AMOUNT
OPTION 1 980 203 198940
OPTION 2 1008 197 198576
OPTION 3 1036 193 199948

BY USING THIS MATRIX FOR YOU APPLICATION YOU WILL HAVE TO PUT HIGHEST AMOPUNT (I.E. 199948) AND RESULT WILL BE AS UNDER:

IF PRICE IS FIXED 203 YOUR APPLICATION WILL BE CONSIDERED FOR 980 SHARES AND IF PRICE IS 197-202, YOUR APPLICATION WILL BE FOR 1008 AND IF THE PRICE IS 193 YOUR APPLICATION WILL BE CONSIDERED FOR 1036 SHARES.

NOTE : SUPPOSE PRICE IS FIXED @ 195 YOUR APPLICATION WILL BE CONSIDERED FOR OPTION 2 AND YOU WILL BE ALLOTED @ 195 LESS 5% AND NOT 197. (I HAVE BEEN DOING THIS PRACTICE FOR THE LAST 5 YEARS AND IN NMDC ISSUE I GOT EXTRA ALLOTMENT WHERE PRICE WAS DISCOVERED LESS.

THOSE WHO DONT UNDERSTAND THIS, CAN APPLY AT CUT-OFF OR AT 203, BOTH HAVING SAME MEANING

ISSUE : PFC CURRENT FPO

CAN ANYBODY GUIDE ME WHERE 5% DISCOUNT TO RETAIL INVESTOR IS CONFIRMED.

THANKS.

CASE STUDY
PL see the belows massage
applied at rs 120 at cut of price got refund of rs 3 as the price discovered was rs 117
but if the retailer applies at 120 with out cut off price even though the discovered price is 117 you will get shares at rs 120 and not rs 117

hence for retail investors have to apply in cut of price in all issues but if he feels there is risk appling in cut of price he can apply at rs 117 to rs 119 and mis the advantance of not getting the share if discovery price is rs 120








176. Sandeep ,Jaipur May 10, 2011 9:37:47 AM IST | Like | Report Abuse

Sandeep ,Jaipur's - IPO Recommendations, IPO Comments, Public Profile

INNOVENTIVE INDUSTRIES LTD IPO

FULL ALLOTMENT. YOU APPLY 1650 SHARES ALLOTED 1650 SHARES

REFUND AMOUNT 3/- PER SHARES (120 - 117 ISSUE PRICE

Don't APPLY. U can get it around issue price at time of listing.

CLD

there is differance in applying at Upper Band AND at Cut Off price. In both cases the allotment price will NOT be same, ALWAYS....

Power Finance Corporation Lts FPO

power finance is 55 paise above the closing price and future is 70 paise above the closing price at 11.23 pm 10 may
yesterdays close 210.95 future 206.5
todays rate 211.55 future 207.25 at 11.25pm

good luck to all who are shorting the fpo

Price bands are given for price discovery which retailers cannot discover. This band is for large institutions who work on many factors & then apply accordingly at various bid prices. It is very difficult for retailers to discover price points. As such, retailers should always apply at Cut Off price. Howerer there is no differance in applying at Upper Band or at Cut Off price. In both cases the allotment price will be same.
This is also true in case of issues where due to poor response the price band is reduced & period for subscription extended. In such cases also if a person has already applied say at upper band of original band then he need not revise his application. He will be alloted shares as per final price fixed by the company after seeing the response from revised price band.

750 carors kay ipo ki yah halat hi, ab 5000 carors kay fpo ka selling pracer dekhna.

750 carors kay ipo ki yah halat hi, ab 5000 carors kay fpo ka selling pracer dekhna.

i applied in morning

198940 rs
980 share.

nice fpo apply.

m.gupta

read about " book building process"
read about " price bid" and "cut-off bid"

if the price is discovered lower than upper band this magic word (cut-off) comes into the action, u may not have seen its magic because u never applied in any ipo where price band is decided lower than upper band.....

m gupta


u said

SUPPOSE ISSUE PRICE IS 193 THEN EVERYONE WHO APPLIED AT OR ABOVE 193 WILL GET SHARES..@193 (EVEN IF INVESTOR APPLIED @ 203, ISSUE PR WILL BE 193)

ans: everyone will get shares who applied above 193 but the rate will not be 193 for all , suppose if one applied @ 195 he will be alloted @ 195 not at 193, if applied @ cut-off then only u will be alloted @ 193.........

u seems to be not aware of magic of the word "cut-off"......
i think u think that its same as upper price band