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How to Find the Best IPO to Watch and Invest in?

In this post, I will show you the best IPO investment strategy that can fetch astronomical gains to your portfolio. And believe me, you can pick the best IPO to watch and invest in just 5 minutes of your time. But before that, I will suggest you to know how to apply for an IPO?

What Is An IPO?

An IPO is the first footstep of any company in the share market. Once the IPO or an initial public offering or a new issue is launched, the company shares are listed on the exchanges and the investors can trade in those shares. They can make a profit or loss according to the price rise or fall in the exchanges.

How To Make Profit From An IPO?

  • By applying for an IPO and once it is allotted to the Demat Account an investor can hold for medium to long term and sell for a good gain. If one can pick a good issue and hold it for long term, they can even make double, triple, 5-times, 10-times out of their investment.
  • If the IPO is allotted the investor can sell it on an opening day, if there are good profits – this is called listing gains.
  • Few investors transfer the right to sell an IPO even before allotment of the same and this is done through grey market transactions.
  • Some investors even sell their IPO application forms for some small gains and these applications are sold at Kostak Rate.

So in order to make a good listing gain or a massive medium-term or long term gains we need to find the best IPO to watch. The strategy I am going to discuss can find you the best IPO in 5 minutes of your time. This strategy can be used on the last day of an IPO.

Making a list of New IPO to Watch

First, you need to know which are the upcoming issues. You can either get this information from the upcoming issues section of our website or you can use the following mobile app.

NFPL has come out with a very simple but useful android app – IPO Watch. To download the app please go to google play store and search for IPO Watch. All upcoming IPO in NSE and BSE are listed in the app.

There are already a few websites to analyze IPOs. But there was the necessity of a mobile application. This new app IPO Watch will bridge the gap. Here not only the investors will be able to see the forthcoming IPOs but also it has a handy recommendation tool so that the investor can easily judge whether or not to invest in the issue.

IPO Watch

There are 3 tabs in the app, number one is Current / Upcoming IPO, next is Past IPO. Check the screenshot above to understand how the app lists IPOs and also recommends them. There is another tab called News which pulls out important news from NSE and BSE data sources.

The best part of this android app is it’s FREE. To download this android app just type IPO Watch in google play search bar and they will redirect you to the app. You can easily install the app from the google play store in a few mouse clicks.

How to Find the Best IPO to Watch from the List?

  • On the last date of application around 12 PM – 1 PM open the IPO’s page in NSE exchange site.
  • Visit NSE –> Products –> Equities –> Initial Public Offerings and choose your IPO.
  • Click on NSE bid details.
  • The IPOs where you will find the Qualified Institutional Buyers(QIBs) are bidding heavily, those are your money multiplier picks and they can give you decent listing gains, as well as they, can be held for the medium to long terms.
  • Check the bid details a few more times and if you find that FIIs and DIIs are bidding heavily for the issue, apply for it.
How To Pick A Good IPO

The logic behind how I find the best IPO to watch and also invest in is when Institutional Investors are bidding heavily in the IPO, buy it. Institutional buyers have the best research team, the smart money is entering the IPO. So the company stock price must go up after listing.

An Example:

24th August 2017 was the last date of Apex Frozen Foods IPO. I checked the bid details.

best ipo investment strategy

Around 1:50 PM of the last day of Apex Frozen Foods IPO, I have checked the NSE bid details and found the QIBs bid is only 0.69 times of the total available quota. So QIBs are not so interested to apply for the IPO. So I advised our clients to avoid the issue. The issue ended up with a mere 1.91 times bid by the QIBs, so oversubscribed by only 0.91 times.

Why this is the Best Way to Find the Best IPO to Watch?

  1. Avenue Supermart IPO was oversubscribed by the QIBs by 104.54 times. The issue price was Rs. 290-299. The stock has made a high of 1837.25 today, so 5 times gain already done within 2 years and 7 months.
  2. BSE IPO was oversubscribed by the QIBs by 24.79 times. The issue price was Rs. 805-806. The stock has opened at Rs. 1085 and made a high of 1194 on the opening day itself, so the investors enjoyed a decent 30% listing gains.

More Examples

Let us discuss the case of Xelpmoc Design And Tech issue. I checked the NSE bid details on the last day for this issue. I found the QIBs are not bidding aggressively in this issue. Their bid was mere 1.24 times in the issue. So I decided to remove this issue from my list of IPO to watch.

IPO to Watch

Now let me check the performance of this issue. The issue price in January 2019 was Rs. 66. Now in November 2019, when I am updating this post the stock is quoting at Rs. 63. So this stock is giving a loss of four and a half percent in the last nine months.

Why IRCTC Issue Was in My List of New IPO to Watch?

In fact, I was a believer that the IRCTC issue will do well because of their presence in every Indian household. But to be double sure I was waiting for the last day of the issue. On the last day, I saw that QIBs are bidding massively for the issue.

IPO to Watch

Till the end, the issue has received 108.79 times bidding from the Qualified Institutional Buyers. So I decided to invest in the issue and also suggested my clients invest in it. Let me check the performance now. IRCTC issue price was Rs. 320. On the listing day, the share opened at Rs. 626. So almost the price doubled on listing itself. Now, this is not the end.

IRCTC Share Price Chart

The stock has rallied to a high of 980.90 on the 13th of November 2019 offering a massive 3 times return with one month. Now the stock is quoting at 875.90. This is the power of this investment strategy.

Conclusion

This is the safest strategy to find the best IPO to watch. The best part of this strategy is you need not do big research on the companies. Just follow the top foreign or domestic institutions. Go with their strategy and you are going to make good money in listing as well as medium to long term.

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