Multibagger IPO: SME stock gives 200% return to allottees in four months

livemint.com:

Multibagger IPO: The investment strategy for an initial public offering (IPO) should not be much different from the stock market's investment strategy because investing in an IPO is like investing in a stock. So, one should try and hold the stock after share allocation as long as one can. This enables an investor to get a compounding benefit as one gets income on the income earned on one's investment amount.

To understand how a long-term view on an IPO may fetch profit for an allottee, one needs to look at the Celecor Gadgets shares. The Celecor Gadgets IPO was launched in the middle of September 2023 at a price band of ₹87 to ₹92 per equity share. The book build issue was proposed for listing on the NSE SME Emerge platform.

Celecor Gadgets shares were listed on 28th September 2023 at 92 per share level. This means the SME stock was listed at par with its upper price band. However, after par listing, the SME share ascended at a faster rate and went on to touch a lifetime high of ₹355 apiece on NSE within four months of the share listing date.

Celecor Gadgets share price today is around ₹290 apiece on NSE, which is still at a much higher level than the public offer price of ₹87 to ₹92 per equity share by the company. Sticking with one's conviction, if an allottee had remained invested with the SME stock after par listing, the absolute value of one's investment would have risen to the tune of over 200 per cent. As an investor was allowed to apply in lots and one lot comprised 1,200 company shares, the minimum investment of an allottee would have been ₹1,10,400.