Comparing IPOs
How to Compare IPOs Objectively
A structured, non-promotional checklist for comparing IPOs: business, use of proceeds, financial quality, valuation versus listed peers, issue structure and risks.
By Niva Market Watch Editorial · Published
When several IPOs are open at once, it helps to compare them on the same questions rather than on headlines, subscription numbers or grey market premium. This guide gives a structured checklist built around the offer document. It does not rank or recommend issues — the answers, and what you make of them, depend on your own circumstances.
A six-part checklist
1. The business
- What does the company sell, to whom, and how does it make money?
- How concentrated is revenue — by customer, product, supplier or geography?
- Who are the listed competitors named in the RHP, and how does the company differ from them?
Source: Our Business and Industry Overview in the RHP — see DRHP vs RHP.
2. Where the money goes
- How much of the issue is a fresh issue and how much is an offer for sale? See fresh issue vs OFS.
- Are the objects specific and costed, or mostly general corporate purposes?
- Who is selling in the OFS, what share of their holding, and at what average cost?
3. Financial track record
- Revenue and profit trends over three years plus any stub period.
- Margins, return on net worth and debt levels.
- Whether operating cash flow keeps pace with reported profit.
See how to read IPO financials.
4. Price
- P/E and price-to-book at the upper band, from Basis for Issue Price.
- How those compare with the listed peers the company chose — and whether those peers are genuinely comparable.
- What price recent pre-IPO investors paid, compared with the IPO price.
5. Issue structure
- Mainboard or SME: different rules, application sizes and liquidity. See Mainboard vs SME.
- The retail / NII / QIB split, which affects how many applicants can be allotted: investor categories.
- Promoter holding before and after the issue, and lock-in details.
6. Risks and governance
- The top risk factors, in the company's own words.
- Outstanding litigation and contingent liabilities, relative to net worth.
- Related-party transactions and any auditor qualifications.
A comparison table you can fill in
| Question | IPO A | IPO B |
|---|---|---|
| Fresh issue vs OFS (₹ crore) | ||
| Main use of fresh money | ||
| 3-year revenue change | ||
| Latest PAT margin | ||
| Debt-to-equity | ||
| P/E at upper band vs peer median | ||
| Top-5 customer share of revenue | ||
| Largest risk factor |
Our compare tool puts the recorded issue details, subscription and GMP of two IPOs side by side; the offer-document questions above still need the RHPs.
Things that are not comparisons
- GMP. An informal quote, not an assessment of the business: why GMP can be unreliable.
- Subscription multiples alone. They measure demand, which can reflect momentum or leverage, and are not comparable across very different issue sizes: how subscription works.
- Scores and ratings without disclosed methods. A single number hides the assumptions behind it.
If you want advice on whether a particular issue suits you, consult a SEBI-registered investment adviser.
Related guides
How to Read IPO Financials in an RHP
A practical walkthrough of the restated financial statements in an IPO offer document: revenue, profit, margins, debt, cash flow and red flags to check.
Offer documents & financialsDRHP vs RHP: What the IPO Offer Documents Contain
What a Draft Red Herring Prospectus and a Red Herring Prospectus are, how they differ, and which sections to read before applying for an IPO.
Grey market premiumWhy IPO GMP Can Be Unreliable
The structural reasons grey market premium is a weak predictor of listing price — thin trading, no disclosure, conflicts of interest and fast-changing sentiment.