IPOs in India
How to Evaluate an IPO
Investors should read the prospectus, examine the business, growth, profits, valuation and use of funds before applying.
Do your homework.
Business
Understand what the company does and how it earns.
Financials
Look at revenue, profit and debt over several years.
Valuation
Compare the price with listed peers on measures like price-to-earnings.
Use of funds
See whether money will be used for growth or to repay debt, and whether it is an OFS.
A comparison
Two similar firms priced at very different multiples suggest one may be expensive.
Ignoring risk factors
They list what could go wrong.
Key takeaways
- Read the prospectus.
- Check financials.
- Compare valuations.
- Note use of funds.
No recording for this one yet - EconReader can read it aloud for you.