About Ipo selling

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Dear i want to sell ipo in pre open session so plz guide me how i m doing
Thanks sir

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Hi @AngleoneT11 Thanks for posting your query, here’s how you can sell IPO shares.

How to Sell IPO Shares: A Step-by-Step Guide

The process is relatively straightforward, but there are a few things you need to keep in mind.

Factors to Consider Before Selling IPO Shares

Before you sell your IPO shares, you need to consider a few factors:

  • Risk: Like any other investment, IPOs involve risk. You should consider your risk tolerance and the impact of selling your IPO shares on your portfolio before making any decisions.
  • Tax Implications: The gains from selling IPO shares are taxable. If you sell shares allotted in an IPO on a listing day or within the first year of listing, you will be liable to pay short-term capital gain tax on your gains. On the other hand, if you sell shares after a year, you can optimize your taxes better.
  • Restrictions to Sell: Generally, there is a lock-up period on selling IPO shares to avoid dumping of shares that can cause the market value of shares to fall. Verify if there are any restrictions for you to sell the shares and make your selling decision accordingly.

How to Sell IPO Shares

Once you have decided to sell IPO shares, either of the following strategies will be helpful for you:

  • Sell on the day of listing: As per researchers and analysts, it is believed that most IPOs tend to perform well on a listing day as compared to other trading sessions. Thus, selling on a listing day is considered better than selling after 2-3 years. However, you need to pay special attention to the pre-market session to decide whether to sell on listing day or not, as it gives a reasonable estimate of where to stock is headed.
  • Partial selling on a listing day to cover your expenses: Selling only partial shares is a great way to recover your initial investment while retaining some part. Let’s understand this with an example – Mr. A holds 150 shares at ₹200 each, and his total investment is ₹30,000. If the stock price gives you a return of 40% on a listing day, the opening price would be ₹280. Under this strategy, he should sell 108 shares out of 150 shares to recover the invested amount. He can keep the remaining 42 shares can be kept for a long period to earn good returns. With this strategy, you can cover the costs you have incurred while staying invested. It helps you make profits in case the stock prices increases in the future.
  • Selling in installments: Another strategy you can implement is selling small quantities at a time. As per this strategy, you can choose to sell after the company’s quarterly reports are out. This can prove beneficial for you as it will give you an idea of whether the stock prices are likely to fall or rise in the upcoming quarter.
  • Selling 50% upfront and 10% every quarter: It is another installment selling strategy, but the difference is instead of selling equal quantities, you sell 50% upfront, recovering your initial investment. The remaining 50%, you can sell in 5 installments of 10% each based on the company’s quarterly report. Generally, this strategy has worked well with companies listed at around 40-50% gain.

When to Sell IPO Shares

Another important question that arises in mind is when can you sell IPO shares, right? Selling IPO shares totally depends on your financial goals. However, before selling, you need to know how much profit you make when you decide to sell and exit the market, irrespective of the selling strategy used.

Note: Generally, investors tend to sell their shares on the listing day of IPOs as the prices are higher compared to the year-end. Simply put, there is no right time to sell the IPO shares as they may differ from one investor to another based on their financial goals. Another important thing that you must know is that, on a listing day, trading starts at 10:00 am unlike at 09:15 am on regular days. So, you just need to implement the right selling strategy at the right time to exit the market to earn profits.

For more details, you can checkout the blog here: What is the Process of Selling IPO Shares | Angel One

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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