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PRE-IPO buying in Equity market

 Hi everyone,



    We saw a good round of IPOs last week in the Indian Equity market. I know about my luck in IPO allotment after following IPO applications for more than a few years. so I decided to take other routes than applying for an IPO. Many times I have heard that we can buy equity shares before IPO. YES, it is possible I haven't shared this information earlier because I was not aware entire process of buying or selling the shares PRE-IPO equity I was waiting in reality to understand how this goes. 


 There might be more than one platform from which we can buy unlisted equity shares in India but I used one among them to buy unlisted shares of Tata Technology will share those details in the later part of this post. I got to know very late but at the right time.


I bought Tat Technologies from one of the platforms where we can buy unlisted shares. as I know my luck of getting shares allotted in the IPO lottery.


process:

--> Create an account of the platform or website that is selling unlisted shares.

--> Add the bank account and demat account-related details to the platform.

--> Added money to the wallet like how we add funds in our trading broker account.

--> Place a buy order tor the shares, like we place a buy or order in our trading account.

Panic mode started (for me at least;-P ) once I had placed this order as this is the first time I am following this process and it is quite big money .

--> It took two to four days to get the un-listed shares into our platform account.

--> I took a deep breath and my panic reduced a bit now as we got shares into account.

--> Now the next headache about booking the profits once it is listed.

--> After this step we didn't have a choice other than waiting for equity to get listed, as I bought the shares of Tata Tech by April and waited(almost 7 months) for it to get listed in the public market.

--> Finally the day for Tata Tech listing, as this IPO had 69 times of subscriptions I guessed at least I would get a listing gain.

A few days before  listing of Tata Tech:

I have got a message from CDSL that my shares of Tata Tech have been moving to my demat account.

Twist on the listing day:

I got an update e-mail and message in the broker account saying that I can't sell the shares which I bought from the pre-IPO market as per SEBI we have 6 month lock-in period.

--> It was my good that it listed with a huge gain during the listing. (not sure I need to laugh or cry)

--> After listing I realized that I had paid 10K in the platform where I bought a PRE-IPO market, so I realized that I was at a loss.

--> I bought one share of Tata Tech for 800+ rs but the IPO price was set as 500 so I have made up my mind for 300+rs of loss per share.

--> After having a conversation with my friends who have also bought with me I got the clarity that I paid a higher price than the market price, I got a clarity on this part.

--> I am a long-term investor/holder of any funds, so have to wait and see how it pans out after 6 months.

Important points:

--> 6 months of lock-in from the listing or IPO start date.

--> Nothing is final unless we get it listed and not sure when it is going to get listed.

--> till it gets listed we will get dividends I know this part I have got the dividends for Tata Tech, if I come across any split or bonus I will update this blog.

--> If we want to book profit earlier to the listing we can do that too but for that we need to download the request letter from the broker site, fill information in it and courier it to the broker's head office. 

I prefer holding it to the listing.


Finnaly:


I got the unlisted shares from this platform:

https://portal.precize.in/referral/XXS7Q1

The final decision is in our hands again. Take the risk according to the depth of our pocket and risk profile.

Cheers and bye for now :)



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