IPO Corner
How to evaluate an Indian IPO on fundamentals — before the grey market premium and WhatsApp forwards get to you.
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Mainboard vs SME — know which one you're applying to
| Mainboard | SME | |
|---|---|---|
| Exchange | NSE / BSE main board | NSE Emerge / BSE SME |
| Minimum application | ~₹15,000 | ~₹1,00,000+ (much higher lot size) |
| Post-listing liquidity | Generally healthy | Often thin — can be hard to exit |
| Disclosure & scrutiny | Higher — SEBI + merchant banker due diligence at scale | Lighter — smaller companies, shorter track record |
| Typical investor base | Retail, HNI, QIB, anchor institutions | Mostly retail and HNI — thinner anchor book |
| Our take | Standard checklist below applies | Treat as high risk — apply the same checklist, but size the bet smaller |
The honest checklist — read before you apply
✓ Majority of issue proceeds fund growth, not just an Offer for Sale
✓ Promoter holding stays meaningful after the issue
✓ Anchor book has reputed mutual funds or insurers, not just family offices
✓ Revenue and profit have grown for 2–3 years, not just the IPO year
✓ Price band is reasonable against already-listed peers in the same sector
✓ QIB portion is genuinely oversubscribed, not just retail hype
✓ You've read the risk factors section of the RHP, not just the summary
✓ You'd still be comfortable holding this for 3+ years if it doesn't pop on listing
⚠ Issue is almost entirely an Offer for Sale — promoters and early investors are cashing out, not raising growth capital
⚠ Loss-making business with no credible path to profitability, priced at an aggressive revenue multiple
⚠ Grey market premium is being used as the only reason to apply — GMP is unregulated, unverifiable and often wrong
⚠ SME issue with a thin or absent anchor book and heavy retail-only demand
⚠ Price band priced well above already-listed sector peers with no clear justification
⚠ "Guaranteed listing gains" chatter on social media or broker calls
⚠ Loss-making business with no credible path to profitability, priced at an aggressive revenue multiple
⚠ Grey market premium is being used as the only reason to apply — GMP is unregulated, unverifiable and often wrong
⚠ SME issue with a thin or absent anchor book and heavy retail-only demand
⚠ Price band priced well above already-listed sector peers with no clear justification
⚠ "Guaranteed listing gains" chatter on social media or broker calls
Read the Risk Factors chapter of the Red Herring Prospectus (RHP) before anything else — it's the one section written specifically to tell you what can go wrong. Grey market premium is not a fundamental signal; treat it as noise, not a buy trigger.
For education and research only. This is a general evaluation framework, not a recommendation on any specific issue. Always read the full RHP and consult your own judgement before applying. All investments carry risk. © 2026 MYFGuide.