Multibagger IPO: The investment strategy for an initial public offering (IPO) should not be much different from the stock market investment strategy because investing in an IPO is like investing in a stock. Therefore, one should try to hold the stock for as long as possible after the share allocation. This allows an investor to earn a compound interest benefit as they receive income from the income they earn on their investment amount.
To understand how a long-term view of an IPO can bring profit to a shareholder, one must look at Celecor Gadgets stock. Celecor Gadgets' IPO launched in mid-September 2023 at a price range of ₹87 to ₹92 per share. The Book Build issue has been proposed for listing on the NSE SME Emerge platform. Celecor Gadgets shares were trading at 92 per share on September 28, 2023. This means that SME stock was trading at the level of its upper price range. However, after the par listing, SME stock rose faster and reached a lifetime high of ₹355 each on the NSE within four months of the listing date.
Celecor Gadgets' share price today is approx ₹290 per piece on NSE, which is still at a much higher level than the public offer price of ₹87 to ₹92 per share of the company.
₹1.10 lakh turns ₹3.48 lakh in four months
If one sticks to his belief: If a shareholder had remained invested in the SME share even after the listing at par value, the absolute value of his investment would have risen to over 200 percent. Since an investor could apply in lots and one lot contained 1,200 company shares, the minimum investment of an allottee would have been ₹1,10,400. If a beneficiary had previously remained invested in the share, the investment would have increased ₹3.48 lakh [{( ₹290 / 92) x ₹1,10,400}].
So, if a beneficiary were to continue to invest in this SME stock after listing at par on the NSE SME Emerge platform, then this would be the case ₹1.10 lakh would have changed ₹3.48 lakh in almost four months.
Disclaimer: The views and recommendations expressed above are those of individual analysts or brokerage firms and not of Mint. We recommend investors consult certified experts before making an investment decision.
Discover a world of benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized news feed – it's all here, just a click away! Log in now!
Topics that might interest you
Comments are closed.