SIR,
AS WE KNOW THAT COMPANY GIVE THERE SHARES TO THE PERSON WITH IT'S IPO. BUT MANY PEOPLE ARE CONFUSE WITH THAT HOW THE COMPANY GIVE THERE SHARES AND WHOM THEY GIVE.
SO BEFORE TO KNOW THAT PROCESS WE HAVE TO UNDERSTAND THE TYPES OF IPO INVESTORS.
1. QUALIFIED INSTITUTIONAL BUYERS i.e; QIB.
2. NON INSTITUTIONAL INVESTORS i.e; NII.
HNI HIGH NET WORTH INVESTORS.
3. RETAIL INVESTORS.
FOR EXAMPLE------ MITUAL FUNDS
PENSION FUNDS
PROVIDENT FUNDS
INSURANCE COMPANY e.t.c.
QIB ARE INVEST WITH VERY LARGE AMOUNT, IN QIB THERE IS SEPECIFIC QUOTA RESERVE FOR ALL TYPE OF CATEGORY IPO'S.
IN MARKET FOR QIB 50% QUOTA CAN BE RESERVED, JUST BECAUSE THEY INVEST VERY LARGE AMOUNT.
IN THIS CATEGORY MORE THEN 2 00000 MONEY CAN PUT AS A BID. IN MARKET MINIMUM 15% QUOTA CAN BE RESERVED FOR THIS CATEGORY.
NII ALSO KNOWN AS HNI MEANS HIGH NET WORTH INVESTOR.
REMEMBER IF YOU TRY TO BID MORE THEN 200000 THEN YOU ARE NOT A RETAIL YOU ARE A HII INVESTOR.
IN MARKET MINIMUM 35% QUOTA CAN BE RESERVED FOR THE RETAIL INVESTORS,
AFTER BIDING ON SHARES, THEN AFTER SOME DAYS A ALLOTMENT PROCESS IS START BY THAT COMPANY........
FOR EXAMPLE- IF ANY COMPANY LIKE ABC COMPANY COME IN THE MARKET, WITH HIS SHARE PRICE OF 1000 DOLLAR, AND THAT COMPANY PUT TOTAL 14 SHARES IN ONE LOT THEN YOU NOT ABLE TO BUY 1 OR 2 SHARES OF THAT COMPANY YOU MUST HAVE TO BUY 1 LOT MEANS 14000 DOLLAR SHARES.
TO BID IN MARKET AND IF YOU WANT SHARES THEN YOU MUST HAVE TO BUY 1 LOT OF ANY COMPANY. IF YOU BID 1 TO 18 LOT OF ANY COMPANY THEN YOU ARE A RETAIL INVESTOR. IF YOU WANT TO GET MORE THEN 18 LOT THEN YOU ARE IN HNI CATEGORY THEN YOU HAVE TO APPLY FROM ANOTHER CATEGORY.
FOR EXAMPLE------- IF ANY COMPANY BROUGHT SHARES OF 100000 AND BID FOR THAT IS COME UP TO 200000 LAKHS, MEANS PRICE IS OVERSUBSCRIBE.
SO, MUST REMEMBER MORE THE IPO IS OVERSUBSCRIBE LESS YOU HAVE A CHANCE TO GET ALLOT FOR SHARES,
MANY TIME YOU HEARD THAT YOU AND YOUR FRIEND BID FOR SHARES OF SAME COMPANY BUT HE GOT SHARES OF THAT COMPANY BUT YOU NOT GET,
SO, THIS IS DONE DUE TO OVERSUBSCRIBE OF THAT SHARE, MEANS IF YOU BID FOR SHARE AND THE VALUE OF BID IS INCREASED MORE THEN SHARES, IN THAT CASE THE SHARE IS EQUALLY DISTRIBUTED BETWEEN ALL THE INVESTORS BUT IN SOME CASE IT HAPPEN THAT DISTRIBUTION IS NOT POSSIBLE BETWEEN THEM AND THE PRICE OF SHARE IS INCREASE VERY HIGH THEN WHOLE SHARE IS GO TO ANY RETAIL INVESTOR BY THE LOTTERY SYSTEM, AND THAT SYSTEM IS TOTALLY COMPUTERISED AND AUTOMATICALLY.
FOR EXAMPLE--- IF AMOUNT OF SHARE LOT IS 1000 AND THIS AFTER BIDING IT'S PRICE BECOME 5000 MEANS THE PRICE OF SHARE IS OVERBID UP TO 5 TIMES, THEN AMOUNT OF SHARES WHICH YOU GET IS 1000 DIVIDED BY 5 WHICH IS 200.
IT IS NOT MATTER FOR HOW MUCH SHARES YOU BID, EVEN YOU CAN BID 5000 FOR 500 SHARES BUT IN THAT CASE ALSO YOU GET ONLY 200 SHARES OF THAT COMPANY DUE TO OVERSUBSCRIBE.
SO, HOPE YOU UNDERSTAND ABOUT THE ALLOTMENT OF SHARES... IF YOU HAVE SOME QUERIES THEN SAY IN COMMENTS.
AND REMEMBER THE BID PROCESS GIVE YOU MORE PRICE SHARES IN LESS PRICE BUT IT CAN MAKE LOSS BY GIVING YOU LESS PRICE SHARE IN MORE PRICE, AND OVERSUBSCRIBE IS A VERY BAD CONDITION IN WHICH YOU GET LESS SHARE OR NO SHARE.
HOW TO AVOID LOSSES IN STOCK MARKET.
HOW TO TRADE LIKE STOCK MARKET WIZARD
AS WE KNOW THAT COMPANY GIVE THERE SHARES TO THE PERSON WITH IT'S IPO. BUT MANY PEOPLE ARE CONFUSE WITH THAT HOW THE COMPANY GIVE THERE SHARES AND WHOM THEY GIVE.
SO, HOW SHARES ARE ALLOT BY COMPANY TO ALL WITH THERE IPO...........
SO BEFORE TO KNOW THAT PROCESS WE HAVE TO UNDERSTAND THE TYPES OF IPO INVESTORS.
- SO, THERE ARE TWO TYPES OF IPO ARE:--
1. QUALIFIED INSTITUTIONAL BUYERS i.e; QIB.
2. NON INSTITUTIONAL INVESTORS i.e; NII.
HNI HIGH NET WORTH INVESTORS.
3. RETAIL INVESTORS.
- QUALIFIED INSTITUTIONAL BUYERS-------- MEANS THOSE ORGANISATIONS WHO INVEST FOR THERE INVESTMENT PORTFOLIO OR FOR PUBLIC.
FOR EXAMPLE------ MITUAL FUNDS
PENSION FUNDS
PROVIDENT FUNDS
INSURANCE COMPANY e.t.c.
QIB ARE INVEST WITH VERY LARGE AMOUNT, IN QIB THERE IS SEPECIFIC QUOTA RESERVE FOR ALL TYPE OF CATEGORY IPO'S.
IN MARKET FOR QIB 50% QUOTA CAN BE RESERVED, JUST BECAUSE THEY INVEST VERY LARGE AMOUNT.
- NON INSTITUTIONAL INVESTORS i.e; NII----- MEANS ALL INDIVIDUAL INVESTORS, NRI , HUF.
IN THIS CATEGORY MORE THEN 2 00000 MONEY CAN PUT AS A BID. IN MARKET MINIMUM 15% QUOTA CAN BE RESERVED FOR THIS CATEGORY.
NII ALSO KNOWN AS HNI MEANS HIGH NET WORTH INVESTOR.
- RETAIL INVESTORS---- MEANS ALL THE INDIVIDUAL INVESTORS JUST LIKE I AND YOU, WHO CAN BID LESS THEN 200000 IN ANY IPO,
REMEMBER IF YOU TRY TO BID MORE THEN 200000 THEN YOU ARE NOT A RETAIL YOU ARE A HII INVESTOR.
IN MARKET MINIMUM 35% QUOTA CAN BE RESERVED FOR THE RETAIL INVESTORS,
AFTER BIDING ON SHARES, THEN AFTER SOME DAYS A ALLOTMENT PROCESS IS START BY THAT COMPANY........
NOW, HOW THE ALLOTMENT IS DONE FOR ALL THE RETAIL INVESTORS JUST LIKE I AND YOU.
- AS WE KNOW THAT WE NOT BUY SHARES OF ANY COMPANY IN OWN WISH WE HAVE TO BUY THE SHARES OF THAT COMPANY IN LOTS.
FOR EXAMPLE- IF ANY COMPANY LIKE ABC COMPANY COME IN THE MARKET, WITH HIS SHARE PRICE OF 1000 DOLLAR, AND THAT COMPANY PUT TOTAL 14 SHARES IN ONE LOT THEN YOU NOT ABLE TO BUY 1 OR 2 SHARES OF THAT COMPANY YOU MUST HAVE TO BUY 1 LOT MEANS 14000 DOLLAR SHARES.
TO BID IN MARKET AND IF YOU WANT SHARES THEN YOU MUST HAVE TO BUY 1 LOT OF ANY COMPANY. IF YOU BID 1 TO 18 LOT OF ANY COMPANY THEN YOU ARE A RETAIL INVESTOR. IF YOU WANT TO GET MORE THEN 18 LOT THEN YOU ARE IN HNI CATEGORY THEN YOU HAVE TO APPLY FROM ANOTHER CATEGORY.
NOW YOU HAVE TO KNOW WHAT IS OVERSUBSCRIBE.
- OVERSUBSCRIBE MEANS, MORE BID FOR LESS SHARES WHICH ISSUE BY COMPANY.
FOR EXAMPLE------- IF ANY COMPANY BROUGHT SHARES OF 100000 AND BID FOR THAT IS COME UP TO 200000 LAKHS, MEANS PRICE IS OVERSUBSCRIBE.
SO, MUST REMEMBER MORE THE IPO IS OVERSUBSCRIBE LESS YOU HAVE A CHANCE TO GET ALLOT FOR SHARES,
MANY TIME YOU HEARD THAT YOU AND YOUR FRIEND BID FOR SHARES OF SAME COMPANY BUT HE GOT SHARES OF THAT COMPANY BUT YOU NOT GET,
SO, THIS IS DONE DUE TO OVERSUBSCRIBE OF THAT SHARE, MEANS IF YOU BID FOR SHARE AND THE VALUE OF BID IS INCREASED MORE THEN SHARES, IN THAT CASE THE SHARE IS EQUALLY DISTRIBUTED BETWEEN ALL THE INVESTORS BUT IN SOME CASE IT HAPPEN THAT DISTRIBUTION IS NOT POSSIBLE BETWEEN THEM AND THE PRICE OF SHARE IS INCREASE VERY HIGH THEN WHOLE SHARE IS GO TO ANY RETAIL INVESTOR BY THE LOTTERY SYSTEM, AND THAT SYSTEM IS TOTALLY COMPUTERISED AND AUTOMATICALLY.
- SO, DISTRIBUTION IS DONE ACCORDING TO BID WHICH YOU DO FOR THAT LOT BUT IN CASE OF OVERSUBSCRIBE AND DUE TO LARGE BID DISTRIBUTION TO ALL IS NOT POSSIBLE THEN COMPUTER LOTTERY SYSTEM IS PROCESS FOR ALLOTMENT OF SHARES.
- PROCESS OF ALLOTMENT IN HNI------ AS WE KNOW THAT IN HNI CTEGORY ALL PERSON ARE BID FOR MORE THEN 200000. AND IF SHARES OF HNI IS OVERSUBSCRIBE THEN PRICE OF SHARE I DIVED BY THE TIMES BY WHICH THAT SHARES ARE OVERSUBSCRIBE,
FOR EXAMPLE--- IF AMOUNT OF SHARE LOT IS 1000 AND THIS AFTER BIDING IT'S PRICE BECOME 5000 MEANS THE PRICE OF SHARE IS OVERBID UP TO 5 TIMES, THEN AMOUNT OF SHARES WHICH YOU GET IS 1000 DIVIDED BY 5 WHICH IS 200.
IT IS NOT MATTER FOR HOW MUCH SHARES YOU BID, EVEN YOU CAN BID 5000 FOR 500 SHARES BUT IN THAT CASE ALSO YOU GET ONLY 200 SHARES OF THAT COMPANY DUE TO OVERSUBSCRIBE.
SO, HOPE YOU UNDERSTAND ABOUT THE ALLOTMENT OF SHARES... IF YOU HAVE SOME QUERIES THEN SAY IN COMMENTS.
AND REMEMBER THE BID PROCESS GIVE YOU MORE PRICE SHARES IN LESS PRICE BUT IT CAN MAKE LOSS BY GIVING YOU LESS PRICE SHARE IN MORE PRICE, AND OVERSUBSCRIBE IS A VERY BAD CONDITION IN WHICH YOU GET LESS SHARE OR NO SHARE.
- IF YOU WANT TO LESS LOSSES IN SHARE THEN MUST READ THIS ARTICLE---
HOW TO AVOID LOSSES IN STOCK MARKET.
- AND IF YOU WANT TO BECOME A GREAT STOCK MARKETER BY KNOWING THE TRICK APPLY BY SUCCESSFUL INVESTORS THEN MUST READ THIS---
HOW TO TRADE LIKE STOCK MARKET WIZARD
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