3 IPOs to Watch in 2026: What to Look For Before Investing

IPO season in India has been relentless. New listings appear every few weeks, many with heavy marketing and celebrity endorsements. This guide helps you cut through the noise and evaluate any IPO systematically.

The IPO trap most retail investors fall into

Most retail IPO investors make the same mistake: they apply because of listing gains — not because of business fundamentals. This works in bull markets where almost everything lists at a premium. In flat or bear markets, many IPOs list at discount and the investor is stuck with shares they did not actually want to hold long-term.

Five things to check in any IPO red herring prospectus

1. Revenue and profit growth trend: Look at the last 3 years. Is revenue growing? Is the profit margin expanding or contracting? A company listing at a high valuation with declining margins is a red flag.

2. The purpose of the IPO: Is the money going to fund business growth (primary issue) or are promoters/early investors exiting (OFS — offer for sale)? A large OFS component means insiders are selling to you — not always bad, but worth noting.

3. Debt level: Check the debt-to-equity ratio. IPOs sometimes use proceeds to repay debt — legitimate. Others list with high debt that will constrain future growth.

4. Promoter holding post-IPO: If promoters retain 60%+ after listing, they are still invested in the business. Below 40% post-IPO is worth scrutinising.

5. Valuation vs peers: What is the P/E at issue price? How does it compare to listed peers in the same sector? Listing at 50x P/E when the sector trades at 20x needs strong justification.

A note on GMP (Grey Market Premium)

GMP is the unofficial premium at which IPO shares trade before listing. It is indicative, not guaranteed. High GMP has preceded poor listings. Low GMP has preceded strong listings. Use GMP as one data point — not as the reason to apply or skip.