#IPO allotment seems like a matter of luck, but what are the legal ways to boost your chances?
Watch 'The Big Story' with Nupur Talwar Suri to find out. #NDTVProfitLive
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NewsTranscript
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10:44some applications may be fraudulent but you know uh finally at the end of the day if there is a
10:48genuine kind of pan card number to the application then there's nothing which the regulator can do
10:53so i think you know you'll have to pick and choose each case as it goes but i don't think
10:57there's any fraudulent activity or you know kind of misuse of the system it's only a matter of you
11:03know sometimes it's luck that despite putting 20 applications you might not get a single application
11:08you know in your favor so you know that's how it works yeah and also avinash what are the common
11:13mistakes you know that one can avoid uh to make sure that they're not any rejections because
11:19that's something that a lot of new investors will be looking at and uh we we do see a lot of
11:26new investors jumping the ipo bandwagon i think see first of all in one of the solutions when you
11:34asked me i told you that you know you got to buy the shares of the parent company much early for
11:39example you know ntpc green is a very big uh ipo which is expected to come in so i think a very
11:44simple way to actually get shares in ntpc green is to buy the ntpc frontline flagship share at
11:50least buy a minimum quantity and obviously you could get benefit by way of the shareholders quota
11:56which evidently will be given in this ipo and the second mistake which a lot of
12:02know that the issue is going to be oversubscribed 100 times 500 times but they still apply only one
12:07application and that too in a bigger quantity i think that needs to be avoided you should put in
12:12the minimum amount in every single application and try to put in as many family members with
12:17multiple accounts you know that increases the chances for you to get an allotment in such kind
12:21of ipos right now Pranav you were mentioning earlier that the rules have been changed
12:26significantly now many people of course wonder whether you know how the changes in fact have
12:32benefited people who are applying for ipos now or whether you know the older system was better
12:38because a lot of people seem to suggest that the newer system is based a lot upon luck
12:46well you know in my view i think the process now is more democratic for sure
12:50so the endeavor there from the regulator side was that more number of people are able to get
12:56allotment albeit or even a single lot so earlier you know you could be very lucky and get a huge
13:02allotment but not many people are getting allotment what this current process ensures
13:07is that more number of people get an allotment but the size is you know the single lot which is
13:13right now Avinash what are the trends that you are seeing in terms of you know
13:17whether people hold on to their allotments or you know do they want to make quick
13:21gains because that is also something that is being highly debated
13:27no i think see before that entirely depends on the risk appetite there is there are some people
13:32who only are interested in listing gains so for them bajaj finance which was offered in 70 rupees
13:39you know in two days you get 175 180 rupees is a very sizable gain but i think you know
13:45my sense is that you know normally in the first few weeks you get a euphoric price and after that
13:51you know the stock starts reacting like today bajaj housing saw some mild correction so i think
13:56it's always better to take out your capital you know whatever you have invested and you know the
14:00rest of the shares or quantity of shares can be held on for the longer term because bajaj housing
14:04according to me you know is one of those companies which is not going to make a public issue quite
14:08frequently they are well capitalized so i think you know you could get a good chance to make a
14:13huge gain provided you have a longer term kind of time frame in mind so i think it all depends on
14:17the investment appetite but 90 percent as pranav said you know my co-panelist is that most of the
14:23people come in for only flipping activity like you know buy the stock in the ipo sell it in the market
14:29and again rotate the same capital in some other ipo so you know that's what actually happens for
14:33ipos so i think that's the trend which you have seen in most of the retail investors
14:37right pranav any thoughts on that is that a trend that you are seeing in retail investors
14:43investors you know wanting to make sure that they get the gains of the listing process because
14:48and you know over the next few weeks we do have a lot of them lined up
14:53well you know that was something which we always knew from an anecdotal point of view but
14:59i think the sebi report which has come out has you know absolutely nailed it and put it you know
15:05absolutely clarified in terms of what's really happening in the ipo market and i think they're
15:10very clear that three out of four retail investors do exit you know the ipo within a week of listing
15:18look so you know like my co-panelist said that as an investor you need to be very clear about what
15:24your strategy is in a bullish market like the one that we have right now the chances of listing gains
15:29are high and you can say there's absolutely nothing illegal or wrong about you know investing
15:34into an ipo from a listing gain point of view but then you should be very clear that in case that
15:39even if the stock lists at a discount you should exit because you've not done any kind of analysis
15:45in terms of you know what the company is doing what are the fundamentals how are the financials
15:50uh how is it uh you know performing for the last three four years who are the board of directors
15:55who are the promoters so irrespective of whether it lists at a premium or at a discount you should
16:00exit the other way to first uh invest into an ipo is the harder way which is to actually study
16:06the drhp understand the company and say that look i'm going to park my money in this company for the
16:11last three years or five years in fact i was just looking at the data yesterday and you know it's
16:17astounding that the ipos which have listed in 2023-24 which is last year if i look at the
16:23average return of those ipos it's an astounding 83 percent the ipos which got listed in 2022-23
16:30which is the year before last their current return is 118 percent so what you're also finding is that
16:36apart from just the listing pop ipos are delivering over the longer term as well
16:41so it doesn't necessarily you know this is something which investors may want to consider
16:45that it's not just about the listing game um you know ipos are delivering a good value over the
16:51longer term and i think one additional point which i would like to make is that you know the
16:56quality of companies that you're now seeing coming to the ipo market is far superior than what you
17:01had in the past and i think the regulator also needs to be commended significantly for this but
17:06a lot of these companies are now you know large in scale uh have had you know prior uh investors
17:12in the form of private equity and venture capital so you are assured that you know you know some
17:17due diligence has already taken place on the company some good governance practices would
17:21already be in place so i think you know on the quality of the companies there is not as much of
17:27a concern which is there of course the valuation is something which needs to be looked at whether
17:32it's with existing listed peers or you know in case of some of the newer technology companies
17:37which are coming which actually don't have a peer you know seeing how institutional investors are
17:43behaving how are the anchor investors behaving and then basing your decision on that basis
17:48that's from a longer term perspective right avinash you know uh what we have seen is as
17:55you know pranav was also pointing out that investor education is something that we
17:59severely lack you know there are people coming in specifically when i say investor education i'm
18:04referring to uh the sme board ipos we've had you know people going in uh for these ipos
18:11to make a quick buck but they've also lost a lot of money there so what is your advice
18:16to first-time investors what is it that they need to keep in mind i think you know clearly
18:23you need to understand what is the business model of the company what is the promoter bandwidth
18:29and most importantly you know what is the kind of scalability in that business you know there
18:33are many good sme companies which have come in and now you know a lot of marquee investors you
18:37know uh have started you know coming as anchor investors so you know there's a lot of serious
18:42money which has come in in fact now the market cap of these sme companies is more than a lakh
18:46of crores so you know it's serious money which is being made but yes i think investors should be
18:51very careful about what the businesses they are betting upon with what is the profile of the
18:55promoters and most importantly is the business scale level you know recently just to give some
19:00facts that 12 crore ipo got a response of 4800 crores you know in the bidding process and you
19:05know the company did not even have a profit of two crores so you know these kind of ipos actually
19:09spoil the mood in the sme market people think that everything is you know uh you know wrong
19:14in the sme market that's not the case so i think such kind of things will keep on happening but i
19:18think we need to have a proper due diligence on the part of the merchant bankers and obviously
19:23you know the regulator is doing a great job but finally the investor should know what business
19:27they are betting on right absolutely uh Pranav as well as Avinash thank you very much both of you
19:33for taking out the time to join us on the big story thank you all right so as both of them
19:41said investors do need to be careful now it is not just ipos but in fact ever since covid has
19:48hit the financial landscape has seen a surprising shift now it's no longer dominated by just the
19:54metros the north and the east have been leading the charge in adding more investors in fact the
19:59number of north indian investors on the national stock exchange has now skyrocketed surging over
20:05four times to 35.7 million since fy20 not far behind is the east driven by the northeastern
20:12states odisha and west bengal has nearly quadrupled its base adding 8.9 million investors over the
20:18same period meanwhile the west that is home to the financial hubs of mumbai and gujarat
20:24saw a more modest threefold rise to 30 million down south the investor base has more than doubled
20:31now sitting at 20 million now rising incomes better internet access and adhar facilities
20:38are helping make the stock market participation more accessible to everyone no longer making it
20:44the playground of just the metro elites
21:04according to the national stock exchange the number of registered investors in north india
21:08especially since the last four years have quadrupled and i am outside the shivnathar
21:13university here in greater noida with a few of the students who themselves are registered investors
21:19so guys uh you can just start by telling me your name and your age i'm shivansh i'm 22
21:25i'm pranav i'm 21 i'm devansh i'm 21 i'm devansh i'm 21 i'm ayush i'm 20 so i'll start off with you
21:34guys uh i'll just ask you how did you start investing and when did you start investing
21:39okay i'm very new to investing i only made my first investment last month
21:44and i'm using one of the online brokerage platforms okay so how did you come across
21:50like the investing part and how who who introduced you to it uh my friend did
21:55uh in anyone in your family or your friends in inner circle that also invests
22:00most of my friends do and my elder sister also does okay right so you tell me so i got into
22:06investing a few years ago around like in the covid time and my father was the one who was
22:11interested in the stock market so that's how i got into investing how long have you been investing
22:16i've been investing since uh 20 uh 2020 and like in 2021 i made my own d-mat account since i was
22:23an adult at that point uh anyone in your family or your friends that also invests yeah my father
22:28is really key is a keen investor and he's very active in tracking the stock market so any
22:33particular investment strategies or any other like in basic patterns that you follow when you're
22:37investing so basically i mostly used to look at intraday trading so i used to just uh first there
22:44was a thing there was a lack of knowledge so i didn't used to know what to do at the start but
22:48then i started following some online and my dad used to mentor me so basically i just did whatever
22:54he taught me basically right so how long have you been investing i started investing in 2021 after
22:59the covid recovery happened so i couldn't take like i couldn't capitalize on it but
23:04uh yeah i started investing around any particular investment strategies that you follow mostly just
23:09fundament i look at the fundamentals of a company and i buy and hold for i i don't buy stocks that
23:14i don't want to hold for more than or for less than a year so any particular websites or platforms
23:19that you follow for tips as well nothing for tips but for my research i use screener trendline and
23:24value picker so any family and friends for you as well that invest not really i mean my family
23:31made some mistakes that's why i got into the market and i wanted to correct them that's why
23:36so how long have you been investing i've started investing recently only like five or six months
23:41ago so uh so any again any particular patterns or investment strategies that you follow i usually buy
23:48and hold i hold the stocks that i buy i use screener and trading view for like my fundamentals
23:56i look at the technical i do the technical analysis of the stock and then look at the
24:00fundamentals and then decide on if i'm going to buy or not so any family of friends that
24:07any family of friends that in your circle that invest my brother does and my uncle too so they
24:13mentor me and tell me like i get my stock tips from them too so again any particular platforms
24:20that you follow for tips or any like patterns nothing for tips but i use trading view and
24:26screener for like analyzing the stocks yeah and finally to use now how long have you been
24:31investing i've been investing for a little less than three years now so i started as soon as i
24:36turned 18 um i don't have a strategy per se i believe in investing in stocks that i believe
24:42fundamentally in so i'll buy stocks that i can hold for about 10 20 years and if i like the
24:47company i'll invest discipline with discipline every month a certain amount um my father invests
24:53so i learned a lot from him and about tips i don't really believe in tips so i just look at
24:59fundamentals i use screener i'll use ticker tape or money control for news and that's probably it
25:05so there you can see the students from this university that have been active investors
25:11and some of the answers that they have given with camera person arun si negi this is sriram
25:15ganesh for ndtv well that's all we had time for in this edition of the big story thank
25:21you very much for joining in and do stay with us on ndtv profit homonious
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