how safe is private placement shares ?

POSTED BY Basavareddy ON December 26, 2013 11:33 am COMMENTS (7)

Hi,

I am planning to buy some 10 thousand shares in private placement system from one of the fast growing Real estate company. The company is registered in MCA and it will shortly enter into the NSE. Plz suggest me that how safe is private placement shares.. to buy…

Regards,

Basavareddy.

7 replies on this article “how safe is private placement shares ?”

  1. moneydoc says:

    HAHAHAHAHA !!

    Basavareddy Sir… I am surprised that you are even asking for opinion on this issue…. please pardon my demeanor but as per my knowledge private placement is done only when someone has approached you basis the confidence you have in this company or they would have shared some critical info. Incase it is a dealer who is trying to offload shares then you need to probe who is selling the same to you and why>>?? BTW have you taken note of the companies activities and scale of operations …. what is their balance sheet like…. what is their ROE … is their gearing ratio favorable !!! Incase you have these figures handy and have confidence on the management to deliver over long term please don’t ask this question on a Janta forum, because it is a PRIVATE PLACEMENT not a PUBLIC OFFER !! Hope I have been able to reason out why I started with a laugh …. Please pardon my way of putting this across…. as it is not meant to offend you in any manner.

    Let me cite one example…. have you got any info about Ratnakar Bank and how it has been moving …. it is still not listed !!!

    Please understand as per the risk reward matrix even if this sounds risky the rewards are rather high and hence although Ashalanshu has hinted you towards the downside aspect, please remeber neighbour’s envy is owner’s pride….. private placement is usually done by investors globally to become Richer than RICH ! So if you are already rich please consider or else stick to normal asset allocation for the time being.

    I am available for clarifications over and above if any…..

  2. hemanthchandra62 says:

    Hi Basavareddy,

    Sorry to ask you …. what is this ‘private placement system’…. can u plz explain

    Regards,
    Hemanth.

  3. ashalanshu says:

    Dear Basav, in future this choice may prove either INFY or DSQ for you. Be ready to accept the both outcome. if it ‘ll prove Infy, you ‘ll be happy, for DSQ, please do not curse yourself in future for opting a wrong choice. As simple as that.

    Thanks

    Ashal

  4. Basavareddy says:

    Thanks to Ashal & Rahul.

    I am purchasing those shares at basic price only… Only thing is the performance of the company in future…depends to gain the growth..

    Basavareddy.

  5. ashalanshu says:

    Dear Rahul, I did not say NO. I leave it to his choice for this Risk Reward thing.

    Thanks

    Ashal

  6. rahul123 says:

    Dear Ashal,

    It is also important to know at what price he is getting those shares.

    If Basav is getting those shares at good discount then the risk reward scenario will change.

    Thanks,
    Rahul

  7. ashalanshu says:

    Dear Basav, as the company is unlisted as of now and it belongs to Real estate, “DO it at your own risk” ‘ll be my call to you. Just look at the performance of DLF, Unitech, Purvankara, Parshvanath and other listed companies from real estate sector and you ‘ll come to know what I mean. 🙂

    Thanks

    Ashal

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