How to Earn Extra Returns in Equity Markets Passively?
Here’s a good opportunity for retail investors to earn extra returns in equity markets in the proverbial passive way – Investing in Offer for Sale (OFS) and Follow-On Public Offers (FPOs) which are expected to flood the markets in the next 2 years (FY16 & FY17) courtesy of the Govt’s disinvestment drive (Govt. will be reducing its stake in select Public Sector Units). Past trends suggest that one can earn “passively” anywhere between Rs. 5,000 to Rs. 10,000 per year in these OFS/ FPOs. And in case all your family members apply then the “passive” earnings only get multiplied.
What is the Opportunity?
The Govt. has planned OFS/FPOs worth ~Rs. 35,000 crores in FY16 which means that an issue can be expected on an average each month in FY16. In the recent OFS of Coal India & REC (in Apr, 2015), several retail investors managed to earn handsome returns. Also, retail investors were offered these OFS issues at a discount.
The entire process of retail investors subscribing to these issues is fairly simple – the process gets completed in a day and the stocks are available for trade the next day. Also, there could be IPO issues in the offing too. Activate the ASBA facility with your Depository Participant (DP), which will enable you to effortlessly apply for IPOs online in 2 minutes.
How Can you Participate in the OFS/ FPO Bonanza?
You need to have a demat-cum-trading account with a broker. If you wanna do away with all this operational headache then your broker could also apply to OFS on the account holder’s behalf. Brokers are often willing to do away with mandatory balances for such accounts.
Feel free to write back to us on [email protected] to know about forthcoming good opportunities in OFS/FPOs.
Happy Investing!!