Steps to Evaluate an IPO 

Published : 15 Mar 2023


Financials is one of the most important aspect one should look into first. Investors should study and analyse the past financial performance of the past 3-5years. A company with zero to marginal debt and that has been profitable over the years would be considered a healthy IPO option to invest.

The Purpose: 

While studying for the IPO, one must study the Red Herring Prospectus published by the company. This document includes all the relevant information about the IPO such as financials, objective of the issue, strengths, risks, what the company does, why the money is being raised, etc.


For any IPO, news about its subscription status comes daily. It defines how many investors have applied to the IPO. One can avoid an IPO if the IPO is undersubscribed, meaning that investors do not find the company good for investing in.

Future Prospects: 

One of the most important factors while analyzing an IPO is the company’s plans. One should ensure that the company wants to use the profits to expand and is at par with its competitors with its plans for new products and services.

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