India’s IPO market has seen an explosion in recent years as companies flock to the primary market to get listed and raise money. India has two IPO types – Mainboard IPO and SME IPO. Big companies that are well established and want to raise big capital get listed on the mainboard of major stock exchanges like NSE and BSE. Smaller companies that want to raise smaller amounts of capital are listed in SME IPO like NSE Emerge and BSE SME.

Companies from diverse sectors are lining up to tap the domestic market that is flush with liquidity and an aspiring young population that has money to invest. But as an investor, should you participate in the current IPOs and upcoming IPOs or should you invest in companies that have been listed for quite a few months or years? In this article, we will discuss that and the risks involved in IPO investing.

The IPO Explosion

Since the covid in 2020, India has witnessed a surge in the number of demat accounts opened by individuals. The number of demat accounts in India has crossed 20 crore as of August 2025 as many investors turn to the stock market to invest their money to earn good returns. This is because individuals have realized that they can get better returns on their investments compared to the returns from investing in traditional fixed deposits and post office deposit schemes.

Within the stock market, many are taking calculated risk by investing in IPOs which is also known as the primary market. As these new investors tap the primary market, the year 2025 is expected to be another phenomenal year in terms of companies getting listed. In the calendar year 2025, big corporations like Tata Capital raised over Rs 15,500 crore. Other prominent names include HDB Financial Service raising Rs 12,500 crore, LG Electronics raising more than Rs 11,600, Hexaware Technologies raising Rs 8750 crore, National Securities Depository Ltd. raising over Rs 4,000 crore, etc.

Even in the calendar year 2024, more than 300 companies went public through mainboard IPO and SME IPO. Some of the big names that went public in 2024 were Hyundai Motor India raising more than Rs 27,000 crore, Swiggy raising more than Rs 11,000 crore and NTPC Green Energy raising Rs 10,000.

Going forward, there are many heavyweights lined up for going public. Some of them are digital payments providers like PhonePe and Pine Labs, hospitality company OYO, Reliance Jio, Zepto, BOAT, e-commerce platform Meesho, and mutual fund manager ICICI Prudential Asset Management Company among others. The issue size of these companies are huge and the IPO market is likely to be strong with about $20 billion worth of IPOs in the next 12 months, according to Citigroup

What investors must do during the upcoming IPOs?

Though some IPOs get listed at a premium to the issue price and investors get benefited from listing gains, it is better for investors to be cautious during the current times of global uncertainties, Trump’s tariff war and low interest from foreign institutional investors. As a retail investor, you must think long term and take some measures to maximize your returns and minimize the risk.

You must thoroughly study the red herring prospectus and check their fundamentals. As an investor you must check their revenue growth, operating profit, net profit, and debt levels over the past 3 to 5 years. It is better to make a bet on profit making companies rather than companies solely focused on revenue growth with heavy losses. It is also a good habit to compare the PE of the company you are applying with other companies in the same industries to make sure the company’s valuations are not stretched.

If you are tracking the IPO scene, it is better to apply to different companies across various sectors, so that you will have a diversified portfolio. It is not a good idea to put all your eggs in the same basket. As you diversify your holding, you also end up in diversifying your risks and protecting your capital.

Always keep checking the grey market premium (GMP) to track the sentiments of market participants about an upcoming IPO. This will give you an idea if the market sentiment is optimistic or pessimistic about an IPO. In many cases, if the grey market premium is less than the issue price, it is likely that the share of the company will get listed below the issue price.

There are occasions when even a fundamentally strong company’s shares may fall post listing. The reasons may be many like mispricing of shares, high valuation or overall negativity in the market. So, as an investor you should keep checking the share price of the company for better entry points and accumulating quality stocks at a cheaper price.

Finally, you should know what kind of an investor you are. If you are an aggressive investor, you can invest in growth stocks or SME IPOs. If you are a conservative investor, you can invest in blue-chip companies or stable companies with steady growth.

How to apply for IPOs in Aetram Trades

• Open a free demat and trading account in a couple of minutes by clicking the link
• You can use the link to apply to IPOs or you can use the ASBA route to apply to IPOs with Aetram Trades demat account.
• Make sure the correct bank account (given during the time of registration) is linked to your demat account. Also make sure sufficient balance is present in the bank account.
• After logging into your Aetram Trades account, click your profile on the top right. A pop up will open and you can find your BOID (16 digit) or demat account.
• Login to your bank account linked to your demat account, head to the IPO Apply section inside your internet banking account, select your desired IPO, enter the details and apply.

Conclusion

In the coming months, new IPOs are going to flood the market and as an investor you must be ready to seize the opportunity. Retail investors may oversubscribe to popular IPOs and the probability of shares getting allotted to you is slim. However, to pick the right IPO, you must do your homework and thorough research must be done by studying the red herring prospectus and other reports by analysts. If you make selective bets and take calculated risks with the right diversification of stocks, IPO investing can be rewarding.