Upcoming IPOs in India: Key Listings to Watch in 2025
India’s IPO market is set for a busy 2025 with multiple big and mid-cap companies entering the market. Here’s a detailed look at upcoming IPOs, dates, GMP, and investment outlook.
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Published: July 21, 2025 | Last Updated: July 21, 2025
India’s primary capital market is witnessing substantial activity as multiple companies prepare for initial public offerings in 2025. The Securities and Exchange Board of India (SEBI) has received numerous draft prospectuses from companies across diverse sectors. This report examines the regulatory filings, market conditions, and financial metrics associated with anticipated public offerings scheduled for the remainder of 2025.
Current State of India’s IPO Market in 2025
The Indian primary market has demonstrated consistent activity during the first ten months of 2025. According to data from stock exchanges, retail investor participation has increased compared to previous years. Market regulators continue to implement disclosure requirements and governance frameworks that companies must satisfy before receiving approval for public listings.
The Reserve Bank of India’s monetary policy decisions and macroeconomic indicators influence investor appetite for new equity offerings. Institutional investors, including mutual funds and insurance companies, evaluate each offering based on business fundamentals and sector outlook. Foreign portfolio investors assess opportunities within the broader context of emerging market allocations.
Investment banking firms report sustained deal flow across sectors including technology, consumer goods, financial services, and manufacturing. Companies pursuing public listings typically cite reasons such as debt reduction, business expansion, regulatory compliance, and providing liquidity to existing shareholders.
Regulatory Framework and Compliance Requirements
SEBI’s IPO regulations require companies to submit Draft Red Herring Prospectus (DRHP) documents containing detailed financial statements, business descriptions, risk factors, and use of proceeds. The regulator reviews these submissions and may request additional disclosures before granting approval.
Companies must demonstrate compliance with minimum profitability requirements or meet alternative listing criteria. The regulatory framework mandates disclosures about related party transactions, legal proceedings, management compensation, and shareholding patterns. Market infrastructure institutions maintain oversight throughout the listing process.
The current regulatory environment emphasizes transparency and investor protection. SEBI has implemented measures addressing pricing mechanisms, allocation methodologies, and post-listing obligations. These frameworks aim to maintain market integrity and fair treatment of retail investors.
Detailed Examination of Major Upcoming IPOs
Ola Electric: Electric Two-Wheeler Manufacturer
Ola Electric Mobility Private Limited has filed documents with SEBI for a proposed public offering. The Bengaluru-based company manufactures electric scooters and operates manufacturing facilities in Tamil Nadu. According to the company’s filings, the IPO includes both fresh issue of shares and offer for sale by existing shareholders.
Financial Overview: The company’s DRHP indicates it operates in the electric two-wheeler segment, which has received government support through Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme subsidies. The Production Linked Incentive (PLI) scheme for automobile manufacturing also provides incentives for eligible manufacturers.
Financial statements reveal the company’s revenue trajectory and operational expenses. The firm has invested in manufacturing capacity expansion, research and development, and distribution network development. Capital expenditure plans include battery technology development and charging infrastructure deployment.
Market Position and Competition: The electric two-wheeler market includes multiple participants, both established automotive manufacturers and new entrants. Industry reports indicate growing consumer acceptance of electric mobility solutions in urban markets. Factors such as fuel cost economics, government incentives, and environmental considerations influence purchasing decisions.
Competitive dynamics involve pricing strategies, product features, after-sales service networks, and brand positioning. The company faces competition from traditional automotive companies transitioning to electric vehicles and other electric vehicle startups.
Risk Factors: The DRHP outlines several risk factors including technological changes, regulatory modifications to subsidy programs, supply chain dependencies, and path to profitability. The company’s financial statements show the current operational status and cash flow requirements.
FirstCry: Omnichannel Baby and Kids Products Retailer
Brainbees Solutions Limited, operating under the FirstCry brand, has prepared for a public listing. The Pune-headquartered company operates online retail platforms and franchise-based physical stores offering baby and kids products. The company’s business model combines e-commerce operations with offline retail presence.
Business Model Analysis: The company’s revenue streams include product sales through online channels, franchise store operations, and marketplace commissions. Product categories encompass apparel, toys, feeding products, baby care items, and nursery furniture. The company sources products from manufacturers and brands, maintaining inventory across distribution centers.
Financial disclosures indicate revenue growth patterns, operating margins, and working capital requirements. The company’s capital allocation priorities include technology platform enhancements, supply chain optimization, and market expansion initiatives.
Industry Dynamics: The organized baby and kids products market serves demographic segments including first-time parents and families with young children. Market size estimates consider factors such as birth rates, urbanization trends, and household income levels. Consumer preferences increasingly favor organized retail channels offering product variety and quality assurance.
Competition exists from general e-commerce platforms, specialized baby product retailers, and traditional retail outlets. Market positioning depends on factors including product assortment, pricing strategies, delivery capabilities, and customer service quality.
Financial Metrics: The company’s financial statements provide data on gross margins, customer acquisition costs, repeat purchase rates, and inventory turnover. Profitability metrics reflect the balance between growth investments and operational efficiency. The IPO proceeds allocation indicates management’s strategic priorities.
OYO: Hospitality Technology Platform
Oravel Stays Limited, known as OYO, operates a technology-enabled hospitality platform. The company partners with hotel properties, providing standardization services, technology solutions, and customer acquisition support. The business model involves franchise arrangements and service fee structures.
Operational Framework: The company’s platform connects hotel partners with customers through technology infrastructure. Services provided to hotel partners include property management systems, dynamic pricing tools, online distribution channels, and operational training. The company operates across multiple geographic markets with varying regulatory environments.
Financial performance indicators include revenue from service fees, take rates, property network size, and room night bookings. The company has adjusted its operational model based on market feedback and profitability objectives.
Market Context: The hospitality sector experienced significant disruption during pandemic-related travel restrictions and has since demonstrated recovery in domestic travel segments. Business travel, leisure tourism, and budget accommodation segments contribute to overall market demand. Government initiatives promoting domestic tourism and infrastructure development impact sector growth.
Competitive factors include established hotel chains, independent hotels, and other aggregator platforms. Differentiation depends on technology capabilities, standardization quality, pricing competitiveness, and geographic coverage.
Strategic Considerations: The company’s DRHP will outline its path toward sustainable profitability, partner relationship management, and geographic expansion priorities. Investors will evaluate the business model’s scalability and unit economics across different markets.
Swiggy: Food Delivery and Quick Commerce Platform
Bundl Technologies Private Limited, operating as Swiggy, provides food delivery services and quick commerce solutions. The Bengaluru-based company connects restaurants with customers through its technology platform and operates delivery logistics infrastructure. The company has expanded into grocery delivery through its Instamart vertical.
Business Segments: The food delivery segment generates revenue through delivery fees, platform commissions, and advertising services. Restaurant partners pay commissions based on order values. The quick commerce segment focuses on grocery and essential items delivery with rapid fulfillment timelines.
Financial statements indicate revenue growth across segments, contribution margins, and delivery fleet costs. Technology investments support demand forecasting, route optimization, and customer personalization capabilities.
Sector Analysis: The food delivery market has evolved with increasing smartphone penetration and changing consumer preferences. Market size depends on factors including restaurant participation, average order values, and order frequency. The quick commerce segment addresses consumer demand for rapid delivery of daily essentials.
Competition includes other food delivery platforms, direct restaurant ordering channels, and quick commerce operators. Market dynamics involve customer acquisition costs, delivery fleet economics, and restaurant partner relationships.
Financial Performance: The company’s path toward profitability involves optimizing unit economics, reducing customer acquisition costs, and improving operational efficiency. Segment-wise performance metrics provide insight into different business lines’ contribution and growth potential.
PharmEasy: Digital Healthcare Platform
API Holdings Limited operates PharmEasy, a digital healthcare platform offering online pharmacy services, diagnostic test bookings, and teleconsultation facilities. The Mumbai-based company connects patients with pharmacies and diagnostic centers through its technology infrastructure.
Service Offerings: The platform facilitates medicine purchases with home delivery options. Customers can upload prescriptions and receive medication at their location. The diagnostic services segment allows users to book laboratory tests with sample collection at home. Teleconsultation services connect patients with healthcare professionals.
Revenue streams include margins on medicine sales, commissions from diagnostic partners, and consultation fees. The company maintains relationships with pharmaceutical suppliers, diagnostic laboratories, and healthcare practitioners.
Healthcare Market Context: Digital healthcare adoption has increased following changes in consumer behavior and regulatory frameworks enabling telemedicine. The pharmacy retail market includes both traditional outlets and online channels. Diagnostic services market comprises hospital-based laboratories and standalone diagnostic centers.
Regulatory oversight includes drug licensing requirements, data privacy regulations, and healthcare service standards. Companies must comply with state pharmacy regulations and maintain appropriate licenses for medicine distribution.
Financial Health Assessment: The company’s financial statements reveal operational metrics including customer acquisition costs, average order values, and repeat purchase rates. Debt obligations and cash flow requirements factor into the IPO’s structure and proceeds utilization.
Bajaj Housing Finance: Housing Loan Provider
Bajaj Housing Finance Limited, a subsidiary within the Bajaj Finance group, provides housing loans and loan against property products. The company benefits from the parent group’s brand recognition, distribution network, and operational infrastructure.
Business Focus: The company’s product portfolio includes home loans for property purchases, loan against property for various purposes, and developer financing solutions. Lending decisions incorporate credit underwriting processes, property valuations, and risk assessment frameworks.
Financial statements show loan portfolio composition, interest income, credit costs, and capital adequacy ratios. The company’s asset quality metrics include non-performing asset ratios and provisioning levels.
Housing Finance Sector Overview: The housing finance industry serves homebuyers and property owners seeking financing solutions. Market demand relates to real estate activity, income levels, and interest rate environments. Government schemes such as Pradhan Mantri Awas Yojana impact affordable housing segment demand.
Competition includes public sector banks, private sector banks, housing finance companies, and non-banking financial companies. Competitive factors involve interest rates, processing timelines, customer service quality, and product features.
Regulatory Compliance: The Reserve Bank of India regulates non-banking financial companies including housing finance companies. Regulatory requirements address capital adequacy, asset classification, provisioning norms, and governance standards. The company’s public listing ensures compliance with RBI guidelines regarding listed status for larger NBFCs.
Government Disinvestment Pipeline
The Government of India continues its disinvestment program involving stake sales in public sector enterprises. The Department of Investment and Public Asset Management (DIPAM) oversees the disinvestment process following Cabinet Committee on Economic Affairs approvals.
Public Sector Offerings Under Consideration
Indian Railway Finance Corporation (IRFC): The railway financing entity may conduct further public offerings to raise capital for railway infrastructure projects. IRFC provides financing to the Indian Railways for rolling stock acquisition, track modernization, and infrastructure development. The company’s financial profile includes government-backed securities and stable cash flows from lease rentals.
Coal India Limited: The coal mining company may witness additional government stake dilution through offer for sale mechanisms. Coal India operates coal mines across multiple states and supplies coal to power plants, steel manufacturers, and other industrial users. The company’s performance links to power sector demand, production volumes, and cost management.
Life Insurance Corporation of India: Following its 2022 initial public offering, LIC may see further government stake reductions. The insurance company maintains the largest market share in India’s life insurance sector with extensive distribution networks and product portfolios. Financial performance includes premium income, investment returns, and policyholder obligations.
These disinvestment opportunities provide government revenue for fiscal programs while offering investors access to established public sector enterprises with stable business models.
Grey Market Premium: Understanding Unofficial Trading
Grey market premium refers to unofficial trading of IPO shares before their formal listing on stock exchanges. These transactions occur outside regulated exchange platforms and indicate investor sentiment regarding anticipated listing prices.
Mechanism and Interpretation
Grey market trading involves agreements between parties to trade shares at specified premiums above issue prices. These transactions settle after official allotment and listing occur. Market participants view grey market premiums as indicators of demand levels and pricing expectations.
However, grey market premiums do not guarantee listing day performance. Actual listing prices depend on market conditions at the time of listing, overall equity market sentiment, and company-specific developments. Investors should conduct independent analysis rather than relying primarily on grey market indicators.
Factors Influencing Grey Market Activity
Several factors affect grey market premium levels including overall equity market trends, sector-specific momentum, company fundamentals, competitive positioning, and macroeconomic conditions. High-quality businesses with strong growth prospects and reasonable valuations typically attract greater grey market interest.
Market corrections or volatility can reduce grey market premiums even for fundamentally sound companies. Conversely, favorable market conditions may inflate premiums beyond levels justified by business fundamentals.
Investment Framework for IPO Participation
Fundamental Analysis Approach
Investors evaluating IPO opportunities should examine multiple factors including business model sustainability, market opportunity size, competitive advantages, management track record, and financial health. The DRHP document provides comprehensive information for analysis.
Key financial metrics include revenue growth rates, operating margin trends, return on equity, debt-to-equity ratios, and cash flow generation. Comparing these metrics with industry peers provides context for valuation assessment.
Valuation Assessment
IPO pricing involves comparison with listed peers using metrics such as price-to-earnings ratios, price-to-sales ratios, and enterprise value-to-EBITDA multiples. Growth companies may trade at premiums to traditional businesses based on future earnings potential.
Investors should assess whether IPO pricing reflects reasonable value considering the company’s growth trajectory, competitive position, and risk factors. Overvalued IPOs may underperform regardless of business quality.
Risk Management Strategies
Diversification across sectors and market capitalizations reduces concentration risk in IPO portfolios. Position sizing should reflect conviction levels and risk tolerance. Investors should establish clear investment theses and exit criteria before participating in offerings.
Market timing considerations include current equity valuations, interest rate environment, and macroeconomic outlook. Favorable market conditions improve IPO performance probabilities while challenging markets increase volatility risks.
Sector-Specific Investment Themes
Technology and Digital Platforms
Technology companies continue dominating IPO pipelines with offerings from fintech, software-as-a-service, and digital platform businesses. These companies benefit from digital adoption trends, favorable demographics, and technology infrastructure improvements.
Evaluation factors include user metrics, technology moats, network effects, and monetization strategies. Profitability timelines and unit economics determine sustainable business model viability.
Electric Vehicles and Clean Energy
The electric vehicle ecosystem includes vehicle manufacturers, battery producers, charging infrastructure operators, and component suppliers. Government policies supporting electric mobility and environmental sustainability provide tailwinds for sector growth.
Investment considerations include technology differentiation, manufacturing capabilities, distribution networks, and subsidy dependencies. Market share gains and cost competitiveness determine long-term success.
Healthcare and Wellness
Digital healthcare platforms, pharmaceutical companies, and medical device manufacturers address growing healthcare demand. Aging demographics, chronic disease prevalence, and healthcare access improvements drive market expansion.
Regulatory compliance, clinical validation, reimbursement frameworks, and competitive positioning affect business prospects. Healthcare investments offer defensive characteristics alongside growth potential.
Financial Services Innovation
Fintech platforms, digital lending companies, and payment processors transform traditional financial services delivery. Financial inclusion initiatives, digital payment adoption, and regulatory support enable sector innovation.
Credit quality, regulatory compliance, technology infrastructure, and customer acquisition economics determine success in competitive financial services markets.
Regulatory Environment and Policy Impact
SEBI’s Evolving IPO Regulations
The securities regulator continues refining IPO regulations addressing disclosure requirements, pricing mechanisms, and investor protection measures. Recent regulatory changes focus on improving transparency and reducing information asymmetry.
Companies must provide detailed risk factor disclosures, related party transaction details, and use of proceeds breakdowns. Enhanced scrutiny of financial statements and business projections aims to prevent misleading disclosures.
Monetary Policy and Market Conditions
The Reserve Bank of India’s interest rate decisions influence equity market valuations and investor risk appetite. Higher interest rates increase the discount rate for future cash flows, potentially reducing IPO valuations. Lower rates typically support higher equity valuations.
Liquidity conditions in the banking system and credit availability affect investor capacity to participate in public offerings. Macroeconomic indicators including GDP growth, inflation rates, and current account balances provide context for market sentiment.
Tax Considerations for IPO Investors
Capital gains taxation affects investor returns from IPO investments. Short-term capital gains on equity shares held less than 12 months attract different tax rates than long-term capital gains. Investors should consider tax implications when planning investment horizons.
Securities transaction tax applies to equity transactions on stock exchanges. The tax framework influences investment decisions and net returns calculations.
Allocation Mechanisms and Subscription Process
Retail Investor Category
SEBI regulations reserve minimum allocation percentages for retail individual investors applying for amounts up to ₹2 lakh. Oversubscription in the retail category leads to proportionate allocation based on application sizes.
Retail investors can apply through Application Supported by Blocked Amount (ASBA) facility, blocking funds in bank accounts until allotment or refund. This mechanism protects investor funds while maintaining liquidity.
Qualified Institutional Buyers and High Net Worth Individuals
Institutional investors and high net worth individuals participate in separate categories with different allocation mechanisms. Qualified institutional buyers include mutual funds, insurance companies, and foreign portfolio investors meeting specified criteria.
Discretionary allotment authority allows book-running lead managers to allocate shares among institutional investors based on bid quality and investor profiles. This mechanism aims to ensure quality shareholder base development.
Anchor Investor Participation
Selected IPOs include anchor investor portions allowing institutional investors to subscribe before the public offering opens. Anchor investors receive allocation at issue price in exchange for lock-in commitments.
Anchor participation provides demand validation and price discovery input for IPO pricing decisions. The mechanism aims to attract quality long-term investors to new listings.
Post-IPO Performance Considerations
Listing Day Dynamics
Listing day prices reflect demand-supply dynamics, overall market conditions, and investor sentiment. Strong demand typically results in listing premiums above issue prices, while weak demand may lead to listing discounts.
Market makers and institutional investors influence listing day price discovery through buy and sell orders. Retail investors should consider avoiding premature profit booking or panic selling based solely on listing performance.
Medium-Term Performance Factors
Post-listing performance depends on business execution, earnings delivery, competitive positioning changes, and sector trends. Companies meeting or exceeding growth expectations typically sustain positive stock performance.
Quarterly financial results, management commentary, and operational metrics provide updates on business progress. Investors should monitor these developments against initial investment theses.
Long-Term Value Creation
Successful IPO investments generally involve companies with sustainable competitive advantages, scalable business models, and experienced management teams. Long-term wealth creation requires patient capital deployment and fundamental-driven investing.
Companies delivering consistent earnings growth, improving operational metrics, and adapting to market changes create shareholder value over time. Investment horizons extending beyond short-term volatility allow fundamentals to drive returns.
Risk Factors in IPO Investments
Market Volatility Risks
Equity market corrections can adversely affect IPO listing performance regardless of company-specific fundamentals. Macroeconomic shocks, geopolitical events, and sector-specific challenges create volatility.
Interest rate changes, inflation concerns, and global market trends influence domestic equity valuations. Investors should maintain diversified portfolios and avoid excessive exposure to new listings during uncertain market conditions.
Company-Specific Execution Risks
Early-stage companies face execution challenges including scaling operations, maintaining quality, managing cash flows, and competing effectively. Management capability and governance quality significantly influence execution success.
Companies with limited operating histories or unproven business models carry higher uncertainty. Thorough due diligence and realistic expectations help manage these risks.
Liquidity and Lock-In Considerations
Promoters, pre-IPO investors, and anchor investors face lock-in periods restricting share sales. Lock-in expiry dates can create selling pressure affecting stock prices. Investors should monitor shareholding patterns and lock-in schedules.
Limited trading volumes in small-cap IPOs may restrict liquidity for exits. Investors should assess average trading volumes and market capitalization when considering position sizes.
Regulatory and Compliance Risks
Companies must maintain ongoing compliance with listing obligations, corporate governance standards, and disclosure requirements. Regulatory violations or governance concerns can negatively impact stock performance.
Changes in sector-specific regulations may affect business models and profitability. Investors should monitor regulatory developments affecting portfolio companies.
Due Diligence Checklist for IPO Investors
Document Review
Investors should thoroughly read the Red Herring Prospectus including business description, risk factors, financial statements, management discussion and analysis, and legal proceedings. Understanding these elements provides foundation for informed decisions.
Financial statement analysis should examine revenue recognition policies, expense classifications, related party transactions, and contingent liabilities. Auditor reports and qualifications require careful consideration.
Management Assessment
Management track record, industry experience, and corporate governance practices influence business execution capabilities. Promoter background, past ventures, and reputation provide insight into management quality.
Corporate governance structures including board composition, independent director presence, and audit committee effectiveness indicate governance standards. Companies with strong governance frameworks typically demonstrate better long-term performance.
Competitive Analysis
Understanding competitive positioning requires analyzing market share trends, pricing power, product differentiation, and customer retention rates. Competitive advantages may include technology leadership, brand recognition, distribution networks, or cost efficiencies.
Industry structure analysis incorporating Porter’s Five Forces framework helps assess competitive intensity, buyer power, supplier power, threat of substitutes, and barriers to entry.
Financial Health Evaluation
Key financial metrics include current ratio, quick ratio, debt service coverage ratio, and interest coverage ratio. These indicators reveal the company’s ability to meet financial obligations.
Cash flow analysis distinguishes between operating cash flows, investing cash flows, and financing cash flows. Sustainable businesses generate positive operating cash flows supporting growth investments.
Market Outlook and Investment Strategy
Current Market Environment Assessment
The Indian equity market in late 2025 reflects economic growth momentum balanced against valuation considerations and global uncertainties. Institutional investors maintain selective approach toward new offerings based on quality and valuation.
Domestic liquidity conditions remain supportive with sustained mutual fund inflows and insurance company allocations. Foreign portfolio investor activity depends on global emerging market allocations and India-specific factors.
Strategic Allocation Recommendations
Financial advisors generally recommend limiting IPO investments to 5-10 percent of total equity allocations, maintaining diversification across sectors, market capitalizations, and business maturity stages. This approach balances growth opportunities with portfolio stability.
Investment horizons should align with business development timelines. Growth companies typically require 3-5 year periods for business models to mature and profitability to stabilize.
Monitoring and Review Process
Regular portfolio reviews incorporating quarterly earnings updates, management commentary, and industry developments enable timely strategy adjustments. Investors should reassess investment theses when material changes occur in business fundamentals or competitive dynamics.
Exit decisions should follow predefined criteria rather than emotional reactions to short-term price movements. Clear rules regarding stop-loss levels, profit-booking targets, and holding period expectations support disciplined investing.
Conclusion
India’s IPO market in 2025 presents multiple opportunities across diverse sectors and business models. Companies preparing public listings span electric vehicles, digital platforms, healthcare technology, financial services, and consumer goods. Each offering requires independent evaluation based on business fundamentals, competitive positioning, financial health, and valuation.
Successful IPO investing demands thorough research, disciplined execution, and realistic expectations. The DRHP documents provide comprehensive information enabling informed analysis. Investors should prioritize sustainable business models over short-term listing gains.
The regulatory framework established by SEBI emphasizes transparency and investor protection. Government disinvestment programs add public sector offerings to the pipeline. Market conditions, monetary policy environment, and macroeconomic trends influence overall IPO activity levels and performance.
Investors should maintain diversified portfolios, conduct thorough due diligence, and align investments with personal financial goals and risk tolerance. Professional financial advice can provide personalized guidance considering individual circumstances.
Frequently Asked Questions (FAQs)
1. What documents should investors review before applying for an IPO?
Investors should carefully read the Red Herring Prospectus (RHP) which contains detailed information about the company’s business operations, financial statements for the past three years, risk factors, use of proceeds, promoter background, and legal proceedings. The RHP also includes management discussion and analysis sections providing insights into operational performance and future plans. Additionally, investors can review the company’s DRHP filed with SEBI, though the final RHP may contain updates. Financial statements should be examined for revenue trends, profitability metrics, debt levels, and cash flow patterns.
2. How are shares allocated to retail investors in oversubscribed IPOs?
When an IPO receives more applications than available shares in the retail category, allocation follows a proportionate basis subject to minimum lot size requirements. SEBI regulations mandate that at least 35 percent of the total issue size be reserved for retail individual investors applying for up to ₹2 lakh. If the retail portion is oversubscribed 10 times, an applicant will receive approximately 10 percent of the shares they applied for, rounded to the nearest lot size. Some applicants may receive no allocation through a lottery system when proportionate allocation results in fractional shares.
3. What is the difference between fresh issue and offer for sale in an IPO?
A fresh issue involves the company creating new shares and selling them to investors, with the proceeds going to the company for its specified use (expansion, debt repayment, working capital, etc.). An offer for sale (OFS) involves existing shareholders, typically promoters or early investors, selling their shares to public investors. The proceeds from OFS go to the selling shareholders, not the company. Most IPOs contain a combination of both fresh issue and OFS. The proportion of each impacts company finances differently—fresh issues dilute existing shareholding but strengthen the balance sheet, while OFS only transfers ownership without affecting company finances.
4. How does the Application Supported by Blocked Amount (ASBA) process work?
ASBA allows investors to apply for IPOs by blocking funds in their bank account rather than paying upfront. The application amount remains in the investor’s account and is simply blocked by the bank, continuing to earn interest during the application period. If shares are allocated, the blocked amount equivalent to the allocation is debited from the account. If no allocation is received or partial allocation occurs, the remaining amount is unblocked immediately after the IPO basis of allotment is finalized. This process protects investor funds, maintains liquidity, and eliminates refund delays. Investors can apply through net banking, mobile banking, or by submitting physical forms to their bank or broker.
5. What are the key financial ratios investors should analyze before investing in an IPO?
Important financial ratios include Price-to-Earnings (P/E) ratio comparing the IPO price with the company’s earnings per share, preferably benchmarked against industry peers. Return on Equity (ROE) indicates how efficiently the company generates profits from shareholder equity. Debt-to-Equity ratio reveals financial leverage and risk levels. Current ratio and quick ratio measure short-term liquidity and ability to meet obligations. Operating margin and net profit margin show operational efficiency. Revenue growth rate indicates business momentum. Investors should compare these ratios with industry benchmarks and listed competitors to assess whether the IPO pricing is reasonable relative to the company’s financial performance.
6. What happens after shares are allocated in an IPO?
After the basis of allotment is finalized by the registrar in consultation with stock exchanges, successful applicants receive share allocation to their demat accounts. The company credits shares typically 1-2 days before the listing date. Unsuccessful or partially successful applicants receive refunds or unblocking of the remaining amount in their bank accounts. On the listing day, shares begin trading on stock exchanges at prices determined by market demand and supply. Investors can place buy or sell orders through their brokers. Different categories of shareholders face different lock-in periods—promoters typically have 18-36 month lock-ins, anchor investors have 30-90 day lock-ins, while retail investors face no lock-in restrictions.
7. How do grey market premiums work and should investors rely on them?
Grey market premium represents the unofficial premium at which IPO shares trade before listing, indicating market sentiment and demand expectations. Grey market transactions are informal agreements where buyers agree to pay a premium above the issue price, settling after official allotment. For example, if an IPO is priced at ₹100 and grey market premium is ₹20, shares trade unofficially at ₹120. However, grey market premiums are not reliable indicators of listing performance as they involve small volumes, lack regulation, and can be manipulated. Market conditions, overall sentiment, and news flow between application closure and listing significantly impact actual listing prices. Investors should conduct independent fundamental analysis rather than basing decisions primarily on grey market indicators.
8. What are the tax implications of IPO investments?
Short-term capital gains on equity shares held for less than 12 months are taxed at 15 percent (plus applicable surcharge and cess). Long-term capital gains on equity shares held for more than 12 months exceeding ₹1 lakh per financial year are taxed at 10 percent without indexation benefit. Securities Transaction Tax (STT) applies to transactions on stock exchanges. Dividends received from companies are taxable as per the investor’s income tax slab rates after dividend distribution tax abolition. Listing day gains are considered short-term capital gains. Investors should maintain records of acquisition costs, transaction charges, and STT paid for accurate tax computation. Tax treatment may vary for different investor categories including individuals, Hindu Undivided Families, and corporations.
About the Author
Nueplanet
Nueplanet is a financial analyst and content writer specializing in Indian capital markets, IPO analysis, and investment research. With the years of experience covering primary and secondary markets, Nueplanet focuses on providing fact-based analysis derived from regulatory filings, company disclosures, and official market data.
This analysis is based on publicly available information from SEBI filings, company disclosures, stock exchange announcements, and regulatory sources. The content is intended for informational and educational purposes only and should not be construed as investment advice or recommendations.
Commitment to Accuracy: All content is researched using verified sources including SEBI, stock exchanges (NSE, BSE), company websites, and official government publications. Content is regularly updated to reflect material changes in company status, regulatory developments, or market conditions.
About This Publication
This website is dedicated to providing accurate, transparent, and research-based financial news and analysis for Indian investors. Our goal is to help readers make informed decisions through fact-based reporting derived from official sources and regulatory filings.
Our Sources:
- Securities and Exchange Board of India (SEBI) filings and announcements
- Stock exchange (NSE, BSE) disclosures and data
- Company annual reports and quarterly results
- Reserve Bank of India reports and policy statements
- Government ministry announcements and economic surveys
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Disclaimer: This article is for informational purposes only and should not be considered investment advice. Investors should conduct their own research, consult with qualified financial advisors, and carefully read offer documents before making investment decisions. Past IPO performance does not guarantee future results. All investments carry risks including potential loss of capital. The information presented is based on publicly available data as of the publication date and may change.
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