What to do in IPO's (Traders became Investors)

Hi Friends,

IPO's are back on track and moving very fast with time, after the last IPO of Reliance Power which had made history and also made a crack in the market to crash from 22000 levels to 8000 levels, thus after this issue the IPO's were shut down.

But after a long time this year again the IPO's were introduced, but all these IPO's specialy the power sector Ipo's are not giving any profits to the traders, so are the power ipo's a flop scene creators for the traders, Ipo listing gains are not being capturned in the hands of the traders.

Next IPO in the list is the OIL INDIA LTD Ipo, so what is going to be seen in the ipo, the issue has opened on the 7th and likely to close on the 10th of September, the issue type is a 100% Book Built Issue IPO, minimum 6 shares have to be applied and the issue price is fixed in between 950 - 1050 levels, the listing would be done in NSE & BSE both.

Incorporated in 1959, Oil india Ltd is a premier Indian National Oil Company, engaged in the business of exploration, development and production of crude oil and natural gas, transportation of crude oil and production of LPG. Oil india also provides various E&P related services and holds 26% equity in Numaligarh Refinery Limited. Oil India Limited is second largest oil and gas company in India as measured by total proved plus probable oil and natural gas reserves and production.

OIL has over 1 lakh sq km of PEL/ML areas for its exploration and production activities, most of it in the Indian North East, which accounts for its entire crude oil production and majority of gas production. Rajasthan is the other producing area of OIL, contributing 10 per cent of its total gas production.

Presently, OIL’s exploration activities are spread over onshore areas of Ganga Valley and Mahanadi. OIL also has participating interest in NELP exploration blocks in Mahanadi Offshore, Mumbai Deepwater, Krishna Godavari Deepwater, etc. as well as various overseas projects in Libya, Gabon, Iran, Nigeria and Sudan.

Objects of the Issue:

The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges & to raise capital:
1. Exploration and appraisal activities;
2. Development activities in producing fields;
3. Purchase of capital equipments and contracts for facilities;
4. Diversification of existing business in downstream activities.

As of now the issue has been 1.23% over subscribed, just at the time of the issue, as per this is an Oil sector Ipo, compared with the ONGC Stock in the secondary market, we personally feel that, this issue had a premium of more than 100 - 105 points when in the news it was yet to get opened in the market, just at the time of the announcement this was the premium of the share, but now when the share issue is open in the public, the left over premium is just 34 - 40 rs, and this premium is likely to decrease with the time coming on the listing.

After Adani Power and so much of over subscription being seen at the time of the NHPC allotement, but both the issues gave an disappontment to all the traders who were giving an try to gain some points at the time of listing.

But we feel that these IPO's are meant for investors not for traders, risky traders can buy these IPO's with a small quantity and trade with the premium game, but ONGC is a better option to trade then the OIL INDIA Ipo.

If we look at the NHPC listing, is was opened around 41 levels and now its trading below the issue price, within no time it just crashed and people also never got any time to exit from the share, we mean the traders, all the traders became investors and thus no point in booking loss, thus an hold.

We were also warning traders at the time of NHPC Listing, which proved to be very right and we were also right at the point of listing price, it dot opened at our spot price.

Better to trade in small quantity and ONGC share is better than the Oil India IPO.

IPO's thus are much better for investors, not for traders, in such a bull run the IPO's ADANI & NHPC are underperforming, god knows what will happen to other IPO's no one expected this.

For long term we are very bullish at NHPC & OIL INDIA LTD, but traders may become investors, not only once we saw a flop show, but two times, even after over subscription in NHPC issue, it gave a flop show and trading below the issue price in the bull run(all time highs for the year).

Disclaimer : -But still these are my personal views, one can make up there mind after taking advices from other financial advisors also, as per we won't be held responsible for any profits or losses.

Regards

Captain

www.moneybaghunting.blogspot.com