Since allotment of shares takes a few weeks, banks offer you the Stockinvest facility to earn interest on your application money. So investors lose less if allotment is denied, or only partial, and the subscription amount is returned. Many non banking finance companies and the lead managers offer investors a facility to borrow money and apply for shares in the book building category. The company must raise the capital for some specific purpose and this must be mentioned in the offer document. An investor can use his judgement about the fundamental value of the issue and its objects.
Management is by far the deciding factor in applying for an issue.
You have to see if it is competent and will deliver its promises. The current top ten shareholders will also be listed and also the history of the business. The prospectus has a list of risk factors and the management perception of how it will tackle them. This will provide insights to investors on whether to subscribe to the issue or not. Litigations against the company, payments that the company is yet to receive, any defaults of payments that the company has made etc will be mentioned in the risk factors.