How To Increase Your Chances Of Getting An IPO Allotment: Tips & Tricks | Neil Borate | Moneynomics

Summary

In the podcast 'Moneynomics with Mint', Neil Borate and his colleague Sashe discuss the popularity of IPOs in India, noting that many investors sell their shares within a week. They highlight findings from a SEBI study and advise on increasing allotment chances through different investment categories, such as retail, small HNI, and big HNI. They also touch on the gray market, shareholders' quota, and the risks associated with IPO investing, concluding with a cautionary note about the current bull market's influence on IPO performance.

Takeaways

• 😀 IPOs have become a popular investment choice in India, with many people participating in them as a form of national pastime.
• 📈 According to a SEBI study, about half of individual investors sell their IPO allotments within a week, indicating a trend towards short-term trading rather than long-term investment.
• 💹 In a booming bull market, 75% of IPOs deliver positive returns, which has made IPO flipping a profitable strategy for many investors.
• 🚫 The discussion does not constitute legal advice and does not recommend investing in IPOs; it merely explores strategies to maximize allotment chances.
• 🔑 There are three categories of IPO investors: retail (less than 2 lakh), small HNI (2-10 lakh), and big HNI (above 10 lakh), each with different allotment rules and chances.
• 🎰 The allotment process is lottery-based, and the chances of getting shares do not solely depend on the amount applied for but also on the number of applicants.
• 📉 The gray market, where unlisted shares are traded, is unofficial and not transparent, so it should not be the sole basis for IPO investment decisions.
• 🏢 Some companies offer a shareholders' quota for those who own shares in the parent company, which can increase the chances of allotment.
• 💼 Employee quotas are another way to increase allotment chances, but they require verification, and many applications may be rejected if the applicant is not a genuine employee.
• 📱 UPI payments for IPO applications have a high failure rate, possibly due to the system being overwhelmed by the number of applicants, leading to issues with mandate approvals.

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