These days, IPOs are being launched in the stock market and they are getting a great response. Especially the trend of retail investors towards IPOs has increased tremendously. However, most retail investors complain about not getting shares allotted in IPOs. For this, retail investors keep on using various tricks so that they too get shares allotted in IPOs.
Retail investors are using these tricks
According to a report by Money Control, retail investors are focusing on the category of shareholders to increase the chances of getting shares in IPOs. In fact, many companies already listed in the market are launching IPOs of their subsidiaries. For example, the recently launched Bajaj Housing Finance IPO and the Tata Technology IPO that came some time ago. Bajaj Finance and Bajaj Finserv from the Bajaj group are already listed in the market. Many companies of Tata Group including TCS are present in the market.
Reserve category for shareholders
In such IPOs, a portion is reserved for the shareholders of the group companies. Meaning that the reserved portion is for those investors who already have shares of the group companies. This was also seen in the IPO of Bajaj Housing Finance. In such cases, investors are first registering their names in the shareholders’ records by buying shares of listed companies. After that they are applying for IPO in the shareholder category.
Retail investors rush to IPO
Market experts say that in such a situation, the chances of getting shares in IPO really increase. Nowadays it is seen that after the opening of any good IPO, the category of retail investors gets completely filled within a few hours. Many times more bids come in during 3 days. After that the allotment is decided on the basis of lottery.
This is how the chances of getting shares increase
The category of shareholders is also oversubscribed, but the crowd in it is less than the retail category. However, it is not necessary that this happens in all IPOs. For example, in the IPO of Bajaj Housing, the retail category got 7.41 times subscription, but the category of shareholders was subscribed 18.54 times. However, in such cases, investors are trying to increase their chances by investing in both retail and shareholder categories. Investors capable of investing more money are also trying their luck in the HNI category.
