Take a personal loan to invest in equity? More replies than expected

A few days back, I wrote about a friend who suggested a “sure-shot” way to become rich fast - Take a #PersonalLoan and invest in #Equities!
While that idea itself was shaky, what surprised me more was how many people reached out with a variation of the same thought:
👉 “Why not take a loan and invest in #IPOs for listing gains?”

So instead of debating opinions, I looked at last year’s data. Here’s what it shows:
- 100+ companies were listed on the Indian stock markets
- Average listing gains were ~9%
Now compare that with reality:
- Personal loan interest rates are ~10% or higher
- That’s before processing fees, insurance, taxes, and other charges
So even at an aggregate level, the math already looks uncomfortable.

But then comes the usual counter:
“What if I invest only in 'good' IPOs?”

That’s where theory meets reality.
- Identifying “good” IPOs in advance is far from certain
- Even if you get it right, allotment is not guaranteed due to heavy oversubscription
- But the loan EMI starts immediately and runs without mercy

Interest is fixed.
Returns are uncertain.
Allotments are random.

That combination makes this strategy asymmetric in the wrong direction.
Borrowing to invest, especially for IPO listing gains, doesn’t improve odds.
It simply amplifies risk!

There are no shortcuts to wealth.
And if there were, banks wouldn’t be lending at 10%, they’d be investing themselves.
Let’s keep investing simple!