{"id":13177,"date":"2025-04-28T23:50:30","date_gmt":"2025-04-28T18:20:30","guid":{"rendered":"https:\/\/gwcindia.in\/blog\/?p=13177"},"modified":"2025-04-28T23:52:58","modified_gmt":"2025-04-28T18:22:58","slug":"ipo-basics-what-you-must-know-before-you-invest","status":"publish","type":"post","link":"https:\/\/www.gwcindia.in\/blog\/ipo-basics-what-you-must-know-before-you-invest\/","title":{"rendered":"IPO Basics: What You Must Know Before You Invest"},"content":{"rendered":"<h1>IPO Basics: What You Must Know Before You Invest<\/h1>\n<p>An <strong>Initial Public Offering (IPO)<\/strong> is often seen as a golden ticket to early wealth creation.<br \/>\nBut before you invest your hard-earned money into an IPO in India, it\u2019s crucial to understand the fundamentals, risks, and strategies behind it.<\/p>\n<p>In this beginner-friendly guide, we\u2019ll walk you through <strong>everything you must know about IPOs<\/strong> \u2014 explained simply, without jargon.<\/p>\n<hr \/>\n<h3><strong>What is an IPO?<\/strong><\/h3>\n<p>An <strong>IPO<\/strong> is when a private company offers its shares to the public for the first time by getting listed on a stock exchange like <strong>NSE<\/strong> or <strong>BSE<\/strong>.<\/p>\n<p>When you invest in an IPO, you are <strong>buying ownership<\/strong> in a company at an early stage of its public journey.<\/p>\n<p>\u2705 If the company grows, your investment grows.<br \/>\n\u26a0\ufe0f If the company struggles, your money could shrink.<\/p>\n<hr \/>\n<h3><strong>Why Do Companies Launch IPOs?<\/strong><\/h3>\n<ul>\n<li>To raise fresh capital for business expansion<\/li>\n<li>To pay off debts<\/li>\n<li>To give early investors (founders, VCs) a chance to cash out<\/li>\n<li>To gain public visibility and trust<\/li>\n<\/ul>\n<p>In short, an IPO helps a company <strong>grow bigger and stronger<\/strong>, but it also comes under <strong>greater public scrutiny<\/strong>.<\/p>\n<hr \/>\n<h3><strong>Types of IPO Investors<\/strong><\/h3>\n<ul>\n<li><strong>Retail Investors<\/strong>: Individual investors like you and me (Reservation: 35%)<\/li>\n<li><strong>Qualified Institutional Buyers (QIBs)<\/strong>: Mutual funds, insurance companies, etc. (Reservation: 50%)<\/li>\n<li><strong>Non-Institutional Investors (NIIs)<\/strong>: High-net-worth individuals (Reservation: 15%)<\/li>\n<\/ul>\n<p>Retail investors often get special quota benefits and discounts in IPO allotments.<\/p>\n<hr \/>\n<h3><strong>How to Apply for an IPO in India (Through GWC India)<\/strong><\/h3>\n<ol>\n<li>Open a <strong>Demat &amp; Trading Account<\/strong> at <a href=\"https:\/\/www.gwcindia.in\">GWC India<\/a><\/li>\n<li>Log in and select the IPO you want to apply for.<\/li>\n<li>Enter your bid details (price and quantity).<\/li>\n<li>Make payment via <strong>UPI<\/strong>.<\/li>\n<li>Wait for allotment results to be announced.<\/li>\n<\/ol>\n<hr \/>\n<h3><strong>Key Terms You Should Know Before Investing<\/strong><\/h3>\n<table style=\"height: 205px\" width=\"720\">\n<thead>\n<tr>\n<td style=\"text-align: left\"><strong>Term<\/strong><\/td>\n<td><strong>Meaning<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td style=\"text-align: left\">Offer Price<\/td>\n<td>Price at which shares are offered to investors<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left\">Lot Size<\/td>\n<td>Minimum number of shares you must apply for<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left\">Issue Size<\/td>\n<td>Total amount the company wants to raise<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left\">Grey Market Premium<\/td>\n<td>Unofficial price trend before official listing<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left\">Listing Gains<\/td>\n<td>Profit earned if the stock lists higher than the issue price<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>IPO Investing: What You Must Check Before Applying<\/strong><\/h3>\n<p>Before you rush into the next hyped IPO, always check:<\/p>\n<p>\ud83d\udd0d Company&#8217;s financial health (Profit\/Loss trends)<br \/>\n\ud83d\udd0d Strength of management and promoters<br \/>\n\ud83d\udd0d Purpose of raising funds (expansion vs debt repayment)<br \/>\n\ud83d\udd0d Valuation \u2014 is it reasonably priced?<br \/>\n\ud83d\udd0d Peer comparison with listed competitors<br \/>\n\ud83d\udd0d Market sentiment (Is it a bull or bear market?)<\/p>\n<hr \/>\n<h3><strong>Advantages of Investing in IPOs<\/strong><\/h3>\n<p>\ud83d\ude80 Chance to invest early in future leaders<\/p>\n<p>\ud83d\ude80 Potential listing gains on Day 1<\/p>\n<p>\ud83d\ude80 Portfolio diversification<\/p>\n<hr \/>\n<h3><strong>Risks of Investing in IPOs<\/strong><\/h3>\n<p>\u26a0\ufe0f Overhyped companies may crash post-listing<\/p>\n<p>\u26a0\ufe0f No past market performance history<\/p>\n<p>\u26a0\ufe0f Possibility of lower-than-expected allotments<\/p>\n<p>\u26a0\ufe0f Lock-in periods for certain IPO categories<\/p>\n<p>Always balance <strong>opportunity vs risk<\/strong> when considering IPOs.<\/p>\n<hr \/>\n<h3><strong>How IPOs Have Performed Recently<\/strong><\/h3>\n<p>Here&#8217;s a quick look at <strong>IPO listings performance in India over the past few years<\/strong>:<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-13183\" src=\"https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078-300x200.png\" alt=\"\" width=\"479\" height=\"319\" srcset=\"https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078-300x200.png 300w, https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078-1024x683.png 1024w, https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078-768x512.png 768w, https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078-150x100.png 150w, https:\/\/www.gwcindia.in\/blog\/wp-content\/uploads\/sites\/2\/2025\/04\/1588f82a-5171-4db4-9f61-26f0908e4078.png 1536w\" sizes=\"(max-width: 479px) 100vw, 479px\" \/><\/p>\n<hr \/>\n<h3><strong>Quick Tips for First-Time IPO Investors<\/strong><\/h3>\n<ul>\n<li>Invest only what you can afford to lock away for a few months.<\/li>\n<li>Don&#8217;t blindly invest based on grey market premiums.<\/li>\n<li>Read the <strong>Red Herring Prospectus<\/strong> carefully.<\/li>\n<li>Prefer companies with strong fundamentals, not just brand value.<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Final Thoughts: IPOs Are Exciting, But Be Cautious<\/strong><\/h3>\n<ul>\n<li>Investing in IPOs can be a great way to ride a company&#8217;s success story from an early stage.<br \/>\nHowever, <strong>discipline, research, and patience<\/strong> are key to making wise IPO investments.<\/li>\n<li>With a trusted platform like <strong>GWC India<\/strong>, your IPO investing journey becomes easy, secure, and transparent.<\/li>\n<li>Open your GWC India account today and grab upcoming IPO opportunities smartly!<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IPO Basics: What You Must Know Before You Invest An Initial Public Offering (IPO) is often seen as a golden ticket to early wealth creation. But before you invest your hard-earned money into an IPO in India, it\u2019s crucial to understand the fundamentals, risks, and strategies behind it. In this beginner-friendly guide, we\u2019ll walk you [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":13185,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2,1,38,117],"tags":[1029,1017,1023,1013,1024,1019,1014,1027,1012,1026,1011,1015,1022,1016,1030,1018,1025,1028,1021,1020],"class_list":["post-13177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-finance","category-investment","category-ipo","tag-best-ipos-for-beginners","tag-grey-market-premium-ipo","tag-how-ipos-work-india","tag-how-to-apply-for-ipos","tag-investing-in-ipo-2025","tag-ipo-allotment-process-india","tag-ipo-application-gwc-india","tag-ipo-application-via-upi","tag-ipo-basics-for-beginners","tag-ipo-checklist-for-investors","tag-ipo-investing-india","tag-ipo-investment-guide","tag-ipo-listing-gains","tag-ipo-risks-and-rewards","tag-ipo-strategies-for-first-time-investors","tag-ipo-terms-explained","tag-ipo-vs-stock-market-investing","tag-red-herring-prospectus-ipo","tag-retail-investor-ipo-tips","tag-upcoming-ipos-india"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/13177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/comments?post=13177"}],"version-history":[{"count":6,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/13177\/revisions"}],"predecessor-version":[{"id":13184,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/posts\/13177\/revisions\/13184"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media\/13185"}],"wp:attachment":[{"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/media?parent=13177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/categories?post=13177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gwcindia.in\/blog\/wp-json\/wp\/v2\/tags?post=13177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}