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5 Tips to get money for IPO

Published by Octron on June 2, 2009

10 Billion Ruppees in Sunrise Bank, 7 Billion Ruppees in Prime Bank, 1 – 2 Billion in MBB, i.e. around 20 Billion Ruppees already out of civilian hands and the IPO fest seems not to end anytime soon this year in Nepal.

Vibor Bikas Bank is floating 26 lakh (Rs. 100/share, June 10th, 2009), while Chilime Hydropower is floating 23 lakh (Rs. 324/share, tentatively by the first week of Ashad) shares in premium price by end of this month. The consecutive annoucement of IPOs in such a short span of time will be crushing the the small investors, who has already freezed large sum of money in Sunrise & Prime Bank IPOs.

Here are some simple tips to manage cash for IPOs;

1. Sell your existing listed shares immediately. You can always buy back when it comes down. If you hold shares of SCB, NABIL, EBL, its time to sell it now. During selling dont sell everything you have try to sell just 50% of your holdings. You dont want to like that fool who sold gold to buy silver. If you have recently alloted CTZN & BOA share which are not yet listed in secondary market then you can try to sell them online through our forum.

2. If you are those people, who are emotionally attached with your hard earned shares. Or have gut feeling that holding back your exisitng shares will benefit much more then margin lending is one of the way out for you. Get Loan against your exisiting secondary shares. In margin lending the bank will calculate your collateral value as 52 weeks minimum price of the particular share. You will have to freeze lot of shares.

3. Its time to ask help from your friends and family. Borrow some money from your friends, family for 70 days or lesser if you have invested money in Sunrise/Prime Bank. Sunrise Bank might declare results in next 45 – 50 days. So loan against your reputation, loyalty and relationship is one easy way to go. I hear people are lending money ard. 17 – 25% interest rate without any collateral for this shares.

4. Pay your bills late. Mobile Phone Bills, Rental Charges, Utility Bills, etc. Yes you might incur some penalty, but it wont be as huge as loan interest rates.

5. Mauka ka Hira Phornu Bemauka Ma Kaudi Na Chodnu. Try saving every extra bucks by cutting down your cost. You can always carry a bottle of water from home instead of having coke during lunch. Skip a lunch or breakfast (and have Brunch), fasting once in a while is good even for your health. Why do you need to always take public transport or ride on your bike, just for the change try travelling more on your foot than transportation means. Definitely, you wont have to do extra excersie.

The biggest mantra of life is ‘Its not what you earn, that matters, its all about what you save.”
So always develop habit of saving certain percentage of your income in some fund (recurring accounts) for these kind of investments. Its not about how you save in bad times, but in the good times.

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