IPO Checklist: Seven Things to Review Before You Apply

An initial public offering lets a company raise money from the public, but not every issue suits every investor. A short checklist can help you separate a well-prepared offer from a hurried one. Read the prospectus summary first: business model, revenue concentration, promoter background and pending litigation. Check how the proceeds will be used. Money raised for expansion or debt reduction is different from an offer for sale where existing shareholders simply exit. Compare valuation with listed peers on multiple measures rather than relying on one ratio. Review the financials over several years for consistency in revenue, margins and cash flow. Note the lock-in terms for promoters and anchor investors, and decide your allocation before you see the subscription numbers. Remember that subscription levels and grey-market chatter are not a substitute for analysis. This article is informational and not investment advice.