When picking an IPO consider the following factors:
Your investment objective: Investing in an IPO may be done from a long-term objective of getting into the growth of a company as early as possible and staying invested, or from a short-term objective of applying for an IPO at lower prices and selling the shares at a profit after listing.
The company’s core business and management: If the company belongs to a sunrise sector and is run by an experienced management team, it might capitalise on growth opportunities. You should carefully evaluate the company financials along with its growth rate in the last few years. Usually, high growth companies having robust financials attract long-term investors.
How aggressively the IPO is priced: While this may seem slightly complicated for first-time investors, as a rule of thumb you may want to compare the growth rate and valuations of the company with that of the industry leader in the listed space to gauge the attractiveness of the IPO.
Refer to its Red Herring Prospectus: A Red Herring Prospectus or RHP contains comprehensive information about a company planning to raise money via IPO. Every company planning for an IPO must file RHPs at least three days prior to the launch of an offer, in accordance with section 32 of the Companies Act 2013 and SEBI’s Issue of Capital and Disclosure Requirements (ICDR). This document contains multiple sections covering information pertaining to the offer, risk factors, company specific information, the company’s financial, legal & other material information etc.
For further assistance/information you may also check out Ventura’s research notes that are provided with every listed IPO.