What is Listing Gains in IPO?
Listing gains in IPOs are the profits that you get after the shares are listed on the stock market. On the day of the IPOs, mostly because of the demand of the stock, share prices on the exchange get higher.
The investor tries to make a profit by selling these shares and booking a profit.
The difference between the two share prices is called Listing Gains in IPO.
Let’s understand this with the assist of an example,
I got shares of a newly listed company at a bid range of 200.
If on a listing date, the share of a company opens at 230, or at 10% upward price than the bid price, the “listing gains” would be 10%.
However, it is not easy as it looks it depends on your luck whether your bid for the IPO will be selected or not.
Also Read How to Apply for IPO and FPO in SBI (ASBA)? | Eligibility | Benefits | Withdrawal Conditions
How IPO Listing Price is Decided?
The issuer team decides the price band for the IPO.
There is no standardized calculation for it and will decide by seeing the company’s valuation and future prospects.
The team actually gauges the willingness of investors by announcing a price band and then investors make their bid.
When the company receives bids, then it decides on a particular price for a listing of the shares.
An IPO valuation depends on the company’s future growth projections.
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Highest Listing Gain IPOs in India
| Company | Offer Price (Rs) | Listing Date | List Price (Rs) | Last Traded Price (Rs) | Change (%) |
|---|---|---|---|---|---|
| Route Mobile | 350 | 21-Sep-2020 | 708.00 | 1616.75 | 361.93 |
| Suratwwala Business | 15 | 13-Aug-2020 | 16.00 | 67.00 | 346.67 |
| Happiest Minds Tech. | 166 | 17-Sep-2020 | 351.00 | 533.25 | 221.23 |
| Likhitha Infrastruct | 120 | 15-Oct-2020 | 130.10 | 309.45 | 157.88 |
| DJ Mediaprint & Logi | 20 | 13-Apr-2020 | 20.60 | 46.95 | 134.75 |
| Burger King India | 60 | 14-Dec-2020 | 115.35 | 138.25 | 130.42 |
| Rossari Biotech | 425 | 23-Jul-2020 | 670.00 | 975.20 | 129.46 |
| Nirmitee Robotics | 185 | 21-Apr-2020 | 189.00 | 364.00 | 96.76 |
| MTAR Technologies | 575 | 15-Mar-2021 | 1063.90 | 1082.25 | 88.22 |
| Equitas Small Fin. | 33 | 02-Nov-2020 | 31.00 | 58.95 | 78.64 |
| Gland Pharma | 1500 | 20-Nov-2020 | 1701.00 | 2541.95 | 69.46 |
Also Read FAQs – When Can I Sell IPO Shares? Can I Buy & Sell an IPO in the Same Day?
Can I Sell IPO on Listing Day?
Many market analysts believe that an IPO performs better on a listing day as compared to any other trading session.
This reference also depends on the timing of the stock being listed.
When compared to the last three years or more returns in most cases, listing day returns stand out as the winner.
Therefore, it might be a good strategy to sell your stock on a listing day.
A helpful tip is a pre-market session before any company gets listed. The pre-market prices give a good estimate of where the stock is headed and a solid 60% – 70% returns in pre-market are a good point to sell.
You can sell the IPO on Listing Day.
Same way as you sell your shares. You can place orders at 9:45 am i.s. pre-opening time. IPO trading starts at 10 am.
Also Read What is a GreenShoe Option (GSO) in an IPO? – Definition, Example and Process