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Pre-IPO investment offers a unique opportunity to buy shares of companies before they list on stock exchanges, allowing potential for substantial profits post-listing.
What is Pre-IPO Investment?
It involves purchasing unlisted shares before an IPO. For example, Tata Technologies’ pre-IPO price was ₹475, but it listed at ₹1,200, delivering impressive returns. Similarly, investors like Sachin Tendulkar and SoftBank have profited significantly from pre-IPO investments.
How to Identify Pre-IPO Stocks?
Once a company files its Draft Red Herring Prospectus (DRHP) with regulators, pre-IPO shares become accessible. Brokers specializing in unlisted investments facilitate these transactions.
Benefits of Pre-IPO Investments:
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Higher Returns: Shares bought pre-IPO often appreciate significantly upon listing.
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Control: Investors can purchase as many shares as desired, unlike limited IPO allotments.
Risks to Consider:
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Pre-IPO markets are unregulated by SEBI, increasing the risk of fraud.
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A six-month lock-in period post-listing applies, limiting liquidity.
Where to Buy Pre-IPO Shares?
Reputable platforms like ICICI Securities, Kotak Securities, Edelweiss Financial Services, and Stockify offer pre-IPO investment options. Always verify the broker’s credibility before investing.
Top Pre-IPO Stocks:
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HDB Financial Services: ₹1,240
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Hexaware Technologies: ₹985
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Oravel Stays (OYO): ₹54
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Imagine Marketing (boAt): ₹1,550
Conclusion:
For those frustrated by IPO non-allotment, pre-IPO investments provide an exciting alternative to secure shares early and potentially enjoy high returns.
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