DRHP LensMost IPO advice is either a one-word tip or a 400-page document. The decision really rests on four questions: is it a good business, is the price fair, who is selling and who is staying, and do the professionals want it?
The four questions
- Business. Sales growing at 12–15% or more, steady or rising margins, return on equity above 15%, and operating cash close to profit. Use the 12-point checklist.
- Valuation. The IPO price against a fair value range from several methods. See how to value an IPO.
- Stake and governance. How much is fresh money versus an offer for sale, promoter holding after the issue, pledges, litigation and related-party dealings.
- Demand. QIB subscription by day 2 or 3 and the grey market premium, read as mood rather than value.
One score, six parts
DRHP Lens turns these questions into one score out of 100: business and growth 25%, institutional checks 20%, valuation 20%, risk and governance 15%, accounting cross-checks 10% and market mood 10%. Each part is shown separately so the scores do not compete, and every input is cited to its page.
From score to decision
- 68 or more, price reasonable: apply; suits long-term holding.
- 68 or more, price rich: apply with a smaller amount; returns depend on the company growing into its price.
- 58 to 67: apply for one or two lots at the cut-off price.
- 48 to 57: apply only if QIBs subscribe 10x or more by day 2; skip if they stay below 2x.
- Below 48: skip at this price; if the business story holds, it may be worth a fresh look after listing at a lower price.
Acting on the decision
- Apply at the cut-off price so you are not left out if the price is fixed at the top of the band.
- Retail allotment in an oversubscribed IPO is a lottery for one lot, so several large bids do not raise your odds. Use separate eligible family accounts only within the rules.
- Decide before listing day whether you are holding for the long term or selling on listing.
- Check the first two quarterly results against the growth you paid for, and watch the anchor lock-in dates at 30 and 90 days.
Also read: How to value an IPO · How QIBs evaluate an IPO · IPO GMP today
Run it on a real offer document
Upload a DRHP or RHP. DRHP Lens reads it in your browser and gives the DRHP Lens score, a ten-method valuation with industry multiples, promoter and KMP background, the shareholding pattern, the last private-deal valuation and a clear closing note, every figure cited to its page.
Analyse a documentFrequently asked questions
How do I decide whether to apply for an IPO?
Check four things: the quality of the business, the price against a fair value range, who gets the money and how much promoters keep, and QIB demand. Apply when the business is sound and the price is reasonable; size the bid down when the price is rich.
Should I apply for an IPO only for listing gains?
Only when demand is strong (high QIB subscription and a positive grey market) and you are ready to sell on listing day. Listing gains are not guaranteed.
How many lots should a retail investor apply for?
In an oversubscribed IPO, allotment is a lottery for the minimum lot, so one lot per eligible account gives the same chance as a larger bid.
Is the DRHP Lens decision investment advice?
No. It applies fixed, published rules to the offer document for education and research. Read the document and consult a SEBI-registered adviser for personal advice.
This guide is general education about how Indian offer documents are structured. It is not investment advice or a recommendation to subscribe to any issue. Regulations change; always read the current offer document and the SEBI regulations it refers to, and consult a SEBI-registered investment adviser before you invest.