As we discussed in our previous article, how to buy shares and how allocation happens.
Now let’s talk about when I can sell my IPO shares, so get onto the deciding factors. In order to sell off any share, one should compare the listing price with the offering price.
So in case, the listing gain is 70%-80% higher than the offered price, then to book,
the profits one can sell-off on the listing days itself.
If the gain is only in the range of 40-60%, it’s better to sell 50% of the allotted share on listing day.
And sell the remaining in a further installment once the share prices go up.
However, if the gain is merely 30% then it’s better to sell off enough now. And keep remaining for sale in the future.
If the listing price is lower than the offered price, it’s better to hold the shares for some time to at least recover the cost incurred to buy those shares.
Moreover, if the listing price is too low, instead of waiting, it’s better to sell off all of it now than to see its price falling lower.
Today’s New IPO Listing
Face Value in IPO
Book Built Issue IPO
Price Band in IPO
Listing Gains in IPO | Highest Listing Gain IPO in India
When Can I Sell IPO Shares? Can I Buy & Sell an IPO in the Same Day?
Types of Investors in IPO
Lot Size in IPO
How Many Lots Can We Buy in IPO to increase the chances of an allotment?
Can I Buy & Sell an IPO in the Same Day?
Definitely, yes, you can sell off on the listing days.
As per the study conducted by researchers, the maximum profit one can book on the listing is if it’s an overscricbed IPO. In most of the cases the listing price falls below the offered price over a period of 3 years.
On the debut day BSE and NSE allow a special pre-open trading session which last for 45 mins on the listing days.
Let’s say you have purchased the share at Rs 100 before it was listed. You decide to sell it off for Rs.150 thinking to book a profit of 50%.
Once the share gets listed in the stock market for INR 165, then your sales order value is lower than the listing price,
so you will get the listing price.
On the other hand, if the listing price is a sales order value,
which is higher than the listing price, your order will get cancelled.
Can I Sell Initial Public Offering without Demat Account?
Whether or not you necessity a Demat account to invest in an IPO/FPO depends on two aspects:
- Whether you wish to sell the shares you purchase in an IPO/FPO.
Ideally, you do not need a demat account to invest in an IPO/FPO, for you could apply for shares in the physical form. But the physical shares that you get cannot be traded on the exchange (i.e. BSE and NSE).
You will be tied to the IPO shares until you convert them into the demat form.
- The issue size of the IPO/FPO you plan to invest in If the issue size is INR 10 crore+,
it is required for investors to have a demat account.