DLF IPO had an option that retail investors instead of paying 550/- per share, could pay a token 150/- Per share and Pay the rest after allotment.
ICICI Bank FPO also has an offer… instead of paying 950/- investors can pay just 250/- at the time of application and pay the rest within 6 months of allotment.
I am applying to ICICI Bank as an investment, hence I would pay only 250/- upfront and then 4-6 months later pay the balance. On the other hand my father is lured by the 5% discount that ICICI bank offers him and wants to encash it ASAP, hence he is paying the entire amount upfront.
A friend of mine asked me why would anybody make a full payment if the IPO/Offer allows part payment?
My answer (the plain old standard answer….) It Depends!
Why Full Payment
1) If the reasons you are trying to invest is because of “Listing gains” (i.e. you will sell the entire holdings the moment you get the possession of the certificates) Then it makes sense to apply in full. At the time of listing there is a price discovery mechanism which causes the prices to jump up and down a lot… hence improving your chances to make a killing at the time of listing.
2) Lured by the benefit of leverage, a lot of people will make a partial payment and will end up with a non tradable ‘OPTION’… hence reducing the supply of shares. Remember it makes perfect sense to sell the shares when the supply is restricted and you would not like to miss this opportunity 🙂
Why Partial Payment:
1) Lure of leverage… (buy more than the amount of cash in hand) One of the reasons why I am rethinking my old strategy to invest in IPOs is because of the huge amount of capital that gets blocked for 20 days.
2) Long term investment… ICICI will 6 months time for investors to convert the partially paid shares into full shares. So I can effectively hold 95K worth of shares for 6 months by blocking just 25K (sounds tempting??)
3) Over subscription: If the company allows you to pay only 1/3 of the cost upfront and the issue gets oversubscribed 3 times…. well you will get 33K of shares by paying 33K instead of the full 1L.
e-Nagar 
1) its not the entire remaining amount but 250/- per share
2) you have to pay before 26th of July
3) the payment can be made at the ICICI bank branch listed in the letter or by mailing the cheque at the ICICI infotech head office
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thanks a lot Ankur… May I know where do you work? if you dont mind..or you have a webadress where I can get in touch with you…
Regards, Sandeep
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@sandeep…
this is my blog… u can contact me anytime here.
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Hi Ankur
I opted for part payment, but made the rest of the payment on 11th July. Still the stock I have is untradable. Can you guess when the stocks will become tradeable?
Hardeep
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icici in their prospectus said that they r in no hurry… the latest date would be 6 months from IPO
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Ankur I meant DLF not ICICI
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it should take at least 1 week from the last date of making the balance payment
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I have received ICICI IPO allotment. They are now asking for only Rs 250 per share. The rest of the amount (890 – 500 = 490) would be collected later. My question – is this possible to pay the entire amount (250+490) now? If yes, how?
Thanks for your help!
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@sisir…
no there is none.. plus whats the use dude… all the ICICI partially paid shares would be converted to trade able shares together… irrespective of whether u pay today or on the last date of payment.
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I have been allotted 100 DLF shares through partial payment route. Even though shares have been transferred to my account, I’m not able to sell them. I got to know that unless I get a letter from DLF I can’t sell it. Is this true?? Is yes then when can I expect the letter and whom shall I followup with??
Thanks,
Godfather
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