The Complete IPO Guide for Indian Investors · Chapter 15 of 15

Building Your IPO Investment Strategy

Start with a purpose

Decide whether you are applying for listing gains or for long-term ownership. The checks are different: valuation and demand matter more for the first, business quality and cash flow for the second.

A simple checklist

(1) Purpose of the issue and fresh-versus-OFS split. (2) Promoter and pre-IPO selling. (3) Valuation against peers. (4) Anchor book and subscription pattern. (5) Market mood and GMP trend. (6) Your own budget and exit plan. If more than two items worry you, skip the issue: there will always be another.

Position sizing

Decide in advance what share of your investable money any one IPO may use, and stay within it. Many investors keep IPO applications to a small fraction of their portfolio.

Review your results

Keep a log of every issue you applied to, the allotment, the listing outcome and your reason. After twenty issues you will know your own pattern better than any rule of thumb.

Use data, not hype

LiveIPOData's Listing Gains report and IPO Trends show how past issues listed by size, sector and year, which helps you set realistic expectations.

A final word

IPOs are risky. Past listing gains do not guarantee future ones. This book is education, not investment advice.

Key takeaways

• Decide whether you apply for listing gain or ownership.
• Use a written checklist and keep a log.
• Size positions in advance and avoid leverage.
• Skipping an issue is a valid decision.