What is an Initial Public Offer(IPO)? How much money one can make in an IPO?

Definition of IPO?

An initial public offering, or IPO, is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO.

Statistics

Below are the statistics for the performance of last year IPO's in Indian Stock Market and my performance.

Number of IPO's from Mar 2010 to Mar 2011- 60

Number of IPO's Currently trading below their issue price - 44

Number of IPO's currently trading above their issue Price- 16

My Investments and Returns

Number of IPO's from Mar 2010 to Mar 2011- 60

Number of IPO's my company applied for - 21

Number of IPO's in which we made money - 18

Number of IPO's in which we lost money - 3

My total Return on Investment - 33%

I have made around 1.94 lacs during that period from IPO's by investing 6 lacs.

Scenario: If the invested amount is Rupees 4 lacs or $10000 the return on investment will be Rs 1.32 lac or $3300 (assuming the previous performance is repeated).So by making 20-25 transactions a year we can generate $3300 cash.

Below is the link for all the trades that I did in one of my accounts

https://spreadsheets.google.com/ccc?key=0AuNgWOjkT8i4dEx3NWNUdS03Wk1ISmF3SW5HalFyc1E&hl=en&authkey=CIn1-akF

Disclosure:I can help people in investing in IPO's.I assure I will apply for around 8 lacs in an IPO that I am recommending.

References:

http://www.investopedia.com/university/ipo/ipo.asp