i have recieved warrant not a ecs but the have taken my intial name &wrote in ch eg my name is ramesh jain but in the ch it is writeen as R JAIN instead of ramesh jain whether the ch would be cleared or not i am having bank of baroda account rely please RAMESH JAIN rely urgent
It is a betting game - how many times will it be subscribed by estimating demand; what price will it list at etc.
It has become operators' market. Smaller issues like RPP Infra are unlikely to succeed without such a nexus. Operators manage demand. On listing day, about 50% investors come to BUY. In the first two or four days, there is huge buying & thereafter stock stabilizes. Once the operators corner shares worth about 30%, it is easy for the operator to jack-up the stock price thereafter. Operator could be HNIs / some QIBs. Large Funds asks for 5% gain on the very first day besides want an exit. Everything is pre-sold. Large funds that invests in a companies IPO are guaranteed positive returns- merchant bankers try & ensure a pop-up (open price) on listing of about 10 - 15%. There is no fair value.
If companies like RPP Infra require Rs.40 crore to fund its projects, the first stop is to raise the valuation cost & increase the issue size to 48 crores. The operator plays a dual role in garnering interest in the stock through grey market activities & market -making post-listing. If the market is ready to pay Rs.175 for companies like RPP Infra, grey market activity generates interest & demand in the grey market. Grey market price starts quoting from 80, 85 before the stock even lists.
Operators may take the risk if the issue fails. But, they make a killing in at least five out of 10 issues.
Valuations are seemingly higher. QIB / HNIs too, are cornering a large chunk of the offer in small issue size IPOs. They put-in large amounts & if the stock get a lukeworm response on listing, they flip like we saw in Indosolar.
Every bull market brings a large number of new investors. Mostly, these new investors are impatient and want to make quick money. If they can't think of stocks to buy in the secondary market, they start applying for IPOs. Moreover, successful IPOs like Coal India create an impression that large amounts of money can be made from IPOs with little effort. Sometimes, even experienced investors get greedy and start speculating in IPOs. No matter how bad an IPO is, there always will be some retail investors who would apply for it.
Retail investors are churning the money multiple times in various IPOs without caring for valuation.
Let me share my experience on recent low rated IPOs. Gyscoal: I applied just to bet without worrying on fundamental. Issue price: 71 and I sold it in Rs109 = More than 50% profit.. I sold it on listing day...
Gyscoal: present price is Rs44, almost -38%..
I guess, reason of Gyscoal going to 110/112 is because may be there were manupulation..
RPP Infra: I applied and issue price is Rs75/- Sold at Rs78/- I thought this would also get manipulated, I called it dark hourse -- just speculation.. However, it didn't turn out to be Dark horse may be because there were SEBI curb on circular trading and manupulation.. So operators were cautious..
So, with this experience, I would say be careful about low rated IPOs.. If you want to bet, bet on your conscience.
RPP INFA PROJECTS THOSE OF THE MEMBERS HAVE APPLIED IN THIS ISSUE DUE TO THE WRONG ADVICE SHOULD NOT REPENT I HAD ALREADY INFORMED THAT THE MANAGING DIRECTOR OF RPP PROJECTS IS DISQULIFIED FOR BEING THE DIRECTOR FOR FIVE YEARS IT WAS NOT AN GOOD COMPANY TO APPLY FOR MANY OF THE INVESTORS CRY THEY HAVE LOST MONEY IN IPO IT IS ONLY BECAUSE THEY CONSIDER THE ADVICE OF WRONG PERSONS