In 2025, India witnessed a huge wave of IPOs. Companies from all sectors like technology, pharma, retail, electric vehicles, fintech, and infrastructure have entered the market.
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Not only have big investors participated in this festival, but retail investors have also turned to investing in this attraction as new shares. However, while investing here, very thoughtful decisions need to be taken, otherwise there is a possibility of loss.
What exactly will you do?
Study the company’s business model, profits, debt and future growth. People say, avoid investing just because there is talk in the market. Read the company’s prospectus and draft red herring prospectus carefully.
Understand valuation
Many IPOs are priced ‘overvalued’. That is, the price is kept high even when the company’s profits are limited. Instead of investing by looking at the ‘gray market premium’ (GMP), study the actual balance sheet.
Listing gains are not guaranteed
Many people apply to IPOs hoping for ‘listing gains’, but listings can also open below the issue price, especially when the market is volatile. Look at the company’s long-term business, not just the listing day.
Keep a balanced portfolio
Don’t invest all your money in one IPO. Keep a balance between stocks, mutual funds and bonds. IPOs should be a part of your investment, not an alternative.
Consult an advisor
New investors should consult experts or SEBI-registered advisors. Stay away from scams, tips and social media hype.
Investments in the securities market are subject to market risks. This article is for education only and is not investment advice.
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